Correlation Between SLC Agrcola and So Martinho
Can any of the company-specific risk be diversified away by investing in both SLC Agrcola and So Martinho 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 So Martinho 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 So Martinho SA, you can compare the effects of market volatilities on SLC Agrcola and So Martinho 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 So Martinho. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLC Agrcola and So Martinho.
Diversification Opportunities for SLC Agrcola and So Martinho
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SLC and SMTO3 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SLC Agrcola SA and So Martinho SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Martinho 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 So Martinho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Martinho SA has no effect on the direction of SLC Agrcola i.e., SLC Agrcola and So Martinho go up and down completely randomly.
Pair Corralation between SLC Agrcola and So Martinho
Assuming the 90 days trading horizon SLC Agrcola SA is expected to generate 0.64 times more return on investment than So Martinho. However, SLC Agrcola SA is 1.55 times less risky than So Martinho. It trades about 0.13 of its potential returns per unit of risk. So Martinho SA is currently generating about -0.11 per unit of risk. If you would invest 1,731 in SLC Agrcola SA on September 4, 2024 and sell it today you would earn a total of 66.00 from holding SLC Agrcola SA or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLC Agrcola SA vs. So Martinho SA
Performance |
| Timeline |
| SLC Agrcola SA |
| So Martinho SA |
SLC Agrcola and So Martinho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLC Agrcola and So Martinho
The main advantage of trading using opposite SLC Agrcola and So Martinho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLC Agrcola position performs unexpectedly, So Martinho 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 So Martinho will offset losses from the drop in So Martinho's long position.| SLC Agrcola vs. JBS SA | SLC Agrcola vs. Marfrig Global Foods | SLC Agrcola vs. Ambev SA | SLC Agrcola vs. Ita Unibanco Holding |
| So Martinho vs. SLC Agrcola SA | So Martinho vs. Cosan SA | So Martinho vs. Minerva SA | So Martinho vs. Randon SA Implementos |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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