Correlation Between SLC Agrcola and Grendene
Can any of the company-specific risk be diversified away by investing in both SLC Agrcola and Grendene 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 SLC Agrcola and Grendene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLC Agrcola SA and Grendene SA, you can compare the effects of market volatilities on SLC Agrcola and Grendene 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 SLC Agrcola with a short position of Grendene. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLC Agrcola and Grendene.
Diversification Opportunities for SLC Agrcola and Grendene
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between SLC and Grendene is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SLC Agrcola SA and Grendene SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grendene SA and SLC Agrcola 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 SLC Agrcola SA are associated (or correlated) with Grendene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grendene SA has no effect on the direction of SLC Agrcola i.e., SLC Agrcola and Grendene go up and down completely randomly.
Pair Corralation between SLC Agrcola and Grendene
Assuming the 90 days trading horizon SLC Agrcola SA is expected to generate 0.61 times more return on investment than Grendene. However, SLC Agrcola SA is 1.65 times less risky than Grendene. It trades about 0.27 of its potential returns per unit of risk. Grendene SA is currently generating about 0.1 per unit of risk. If you would invest 1,747 in SLC Agrcola SA on September 12, 2024 and sell it today you would earn a total of 148.00 from holding SLC Agrcola SA or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLC Agrcola SA vs. Grendene SA
Performance |
| Timeline |
| SLC Agrcola SA |
| Grendene SA |
SLC Agrcola and Grendene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLC Agrcola and Grendene
The main advantage of trading using opposite SLC Agrcola and Grendene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLC Agrcola position performs unexpectedly, Grendene 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 Grendene will offset losses from the drop in Grendene's long position.| SLC Agrcola vs. Grendene SA | SLC Agrcola vs. Fleury SA | SLC Agrcola vs. Engie Brasil Energia | SLC Agrcola vs. Odontoprev SA |
| Grendene vs. M Dias Branco | Grendene vs. Fleury SA | Grendene vs. Engie Brasil Energia | Grendene vs. Odontoprev 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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