Correlation Between Refinaria and Plascar Participaes
Can any of the company-specific risk be diversified away by investing in both Refinaria and Plascar 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 Plascar 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 Plascar Participaes Industriais, you can compare the effects of market volatilities on Refinaria and Plascar 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 Plascar Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Refinaria and Plascar Participaes.
Diversification Opportunities for Refinaria and Plascar Participaes
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Refinaria and Plascar is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Refinaria de Petrleos and Plascar Participaes Industriai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plascar 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 Plascar Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plascar Participaes has no effect on the direction of Refinaria i.e., Refinaria and Plascar Participaes go up and down completely randomly.
Pair Corralation between Refinaria and Plascar Participaes
Assuming the 90 days trading horizon Refinaria de Petrleos is expected to generate 0.66 times more return on investment than Plascar Participaes. However, Refinaria de Petrleos is 1.52 times less risky than Plascar Participaes. It trades about 0.03 of its potential returns per unit of risk. Plascar Participaes Industriais is currently generating about 0.01 per unit of risk. If you would invest 218.00 in Refinaria de Petrleos on September 4, 2024 and sell it today you would earn a total of 35.00 from holding Refinaria de Petrleos or generate 16.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Refinaria de Petrleos vs. Plascar Participaes Industriai
Performance |
| Timeline |
| Refinaria de Petrleos |
| Plascar Participaes |
Refinaria and Plascar Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Refinaria and Plascar Participaes
The main advantage of trading using opposite Refinaria and Plascar Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Refinaria position performs unexpectedly, Plascar 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 Plascar Participaes will offset losses from the drop in Plascar Participaes' long position.| Refinaria vs. Lupatech SA | Refinaria vs. Recrusul SA | Refinaria vs. PDG Realty SA | Refinaria vs. OSX Brasil SA |
| Plascar Participaes vs. Randon SA Implementos | Plascar Participaes vs. Lupatech SA | Plascar Participaes vs. Rossi Residencial SA | Plascar Participaes vs. PDG Realty 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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