Correlation Between Grupo SBF and GPS Participaes
Can any of the company-specific risk be diversified away by investing in both Grupo SBF and GPS 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 Grupo SBF and GPS Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo SBF SA and GPS Participaes e, you can compare the effects of market volatilities on Grupo SBF and GPS 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 Grupo SBF with a short position of GPS Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo SBF and GPS Participaes.
Diversification Opportunities for Grupo SBF and GPS Participaes
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grupo and GPS is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Grupo SBF SA and GPS Participaes e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPS Participaes e and Grupo SBF 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 Grupo SBF SA are associated (or correlated) with GPS Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPS Participaes e has no effect on the direction of Grupo SBF i.e., Grupo SBF and GPS Participaes go up and down completely randomly.
Pair Corralation between Grupo SBF and GPS Participaes
Assuming the 90 days trading horizon Grupo SBF SA is expected to generate 1.57 times more return on investment than GPS Participaes. However, Grupo SBF is 1.57 times more volatile than GPS Participaes e. It trades about -0.04 of its potential returns per unit of risk. GPS Participaes e is currently generating about -0.09 per unit of risk. If you would invest 1,126 in Grupo SBF SA on October 20, 2024 and sell it today you would lose (38.00) from holding Grupo SBF SA or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo SBF SA vs. GPS Participaes e
Performance |
| Timeline |
| Grupo SBF SA |
| GPS Participaes e |
Grupo SBF and GPS Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo SBF and GPS Participaes
The main advantage of trading using opposite Grupo SBF and GPS Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo SBF position performs unexpectedly, GPS 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 GPS Participaes will offset losses from the drop in GPS Participaes' long position.| Grupo SBF vs. Pet Center Comrcio | Grupo SBF vs. Mitre Realty Empreendimentos | Grupo SBF vs. Mliuz SA | Grupo SBF vs. Direcional Engenharia SA |
| GPS Participaes vs. Taiwan Semiconductor Manufacturing | GPS Participaes vs. Apple Inc | GPS Participaes vs. Alibaba Group Holding | GPS Participaes vs. Microsoft |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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