Correlation Between Ser Educacional and Cruzeiro
Can any of the company-specific risk be diversified away by investing in both Ser Educacional and Cruzeiro 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 Ser Educacional and Cruzeiro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ser Educacional Sa and Cruzeiro do Sul, you can compare the effects of market volatilities on Ser Educacional and Cruzeiro 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 Ser Educacional with a short position of Cruzeiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ser Educacional and Cruzeiro.
Diversification Opportunities for Ser Educacional and Cruzeiro
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ser and Cruzeiro is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ser Educacional Sa and Cruzeiro do Sul in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cruzeiro do Sul and Ser Educacional 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 Ser Educacional Sa are associated (or correlated) with Cruzeiro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cruzeiro do Sul has no effect on the direction of Ser Educacional i.e., Ser Educacional and Cruzeiro go up and down completely randomly.
Pair Corralation between Ser Educacional and Cruzeiro
Assuming the 90 days trading horizon Ser Educacional Sa is expected to generate 1.16 times more return on investment than Cruzeiro. However, Ser Educacional is 1.16 times more volatile than Cruzeiro do Sul. It trades about -0.01 of its potential returns per unit of risk. Cruzeiro do Sul is currently generating about -0.01 per unit of risk. If you would invest 616.00 in Ser Educacional Sa on September 26, 2024 and sell it today you would lose (160.00) from holding Ser Educacional Sa or give up 25.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ser Educacional Sa vs. Cruzeiro do Sul
Performance |
| Timeline |
| Ser Educacional Sa |
| Cruzeiro do Sul |
Ser Educacional and Cruzeiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ser Educacional and Cruzeiro
The main advantage of trading using opposite Ser Educacional and Cruzeiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ser Educacional position performs unexpectedly, Cruzeiro 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 Cruzeiro will offset losses from the drop in Cruzeiro's long position.| Ser Educacional vs. Engie Brasil Energia | Ser Educacional vs. Grendene SA | Ser Educacional vs. M Dias Branco | Ser Educacional vs. BTG Pactual Logstica |
| Cruzeiro vs. New Oriental Education | Cruzeiro vs. TAL Education Group | Cruzeiro vs. Yduqs Participaes SA | Cruzeiro vs. GAEC Educacao 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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