Correlation Between Refinaria and Minupar Participaes
Can any of the company-specific risk be diversified away by investing in both Refinaria and Minupar Participaes at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Refinaria and Minupar Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Refinaria de Petrleos and Minupar Participaes SA, you can compare the effects of market volatilities on Refinaria and Minupar Participaes and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Refinaria with a short position of Minupar Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Refinaria and Minupar Participaes.
Diversification Opportunities for Refinaria and Minupar Participaes
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Refinaria and Minupar is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Refinaria de Petrleos and Minupar Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minupar Participaes and Refinaria is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Refinaria de Petrleos are associated (or correlated) with Minupar Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minupar Participaes has no effect on the direction of Refinaria i.e., Refinaria and Minupar Participaes go up and down completely randomly.
Pair Corralation between Refinaria and Minupar Participaes
Assuming the 90 days trading horizon Refinaria is expected to generate 1.0 times less return on investment than Minupar Participaes. But when comparing it to its historical volatility, Refinaria de Petrleos is 1.16 times less risky than Minupar Participaes. It trades about 0.06 of its potential returns per unit of risk. Minupar Participaes SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,838 in Minupar Participaes SA on January 23, 2025 and sell it today you would earn a total of 702.00 from holding Minupar Participaes SA or generate 38.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Refinaria de Petrleos vs. Minupar Participaes SA
Performance |
| Timeline |
| Refinaria de Petrleos |
| Minupar Participaes |
Refinaria and Minupar Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Refinaria and Minupar Participaes
The main advantage of trading using opposite Refinaria and Minupar Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Refinaria position performs unexpectedly, Minupar Participaes can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Minupar Participaes will offset losses from the drop in Minupar Participaes' long position.| Refinaria vs. Alibaba Group Holding | Refinaria vs. Apple Inc | Refinaria vs. Taiwan Semiconductor Manufacturing | Refinaria vs. Amazon Inc |
| Minupar Participaes vs. Companhia Brasileira de | Minupar Participaes vs. Raia Drogasil SA | Minupar Participaes vs. Lojas Renner SA | Minupar Participaes vs. Minerva SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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