Correlation Between Tupy SA and Gafisa SA
Can any of the company-specific risk be diversified away by investing in both Tupy SA and Gafisa SA 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 Tupy SA and Gafisa SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tupy SA and Gafisa SA, you can compare the effects of market volatilities on Tupy SA and Gafisa SA 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 Tupy SA with a short position of Gafisa SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tupy SA and Gafisa SA.
Diversification Opportunities for Tupy SA and Gafisa SA
Very good diversification
The 3 months correlation between Tupy and Gafisa is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tupy SA and Gafisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gafisa SA and Tupy SA 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 Tupy SA are associated (or correlated) with Gafisa SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gafisa SA has no effect on the direction of Tupy SA i.e., Tupy SA and Gafisa SA go up and down completely randomly.
Pair Corralation between Tupy SA and Gafisa SA
Assuming the 90 days trading horizon Tupy SA is expected to generate 0.3 times more return on investment than Gafisa SA. However, Tupy SA is 3.33 times less risky than Gafisa SA. It trades about 0.0 of its potential returns per unit of risk. Gafisa SA is currently generating about -0.04 per unit of risk. If you would invest 2,182 in Tupy SA on December 4, 2024 and sell it today you would lose (122.00) from holding Tupy SA or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tupy SA vs. Gafisa SA
Performance |
| Timeline |
| Tupy SA |
| Gafisa SA |
Tupy SA and Gafisa SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tupy SA and Gafisa SA
The main advantage of trading using opposite Tupy SA and Gafisa SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tupy SA position performs unexpectedly, Gafisa SA 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 Gafisa SA will offset losses from the drop in Gafisa SA's long position.| Tupy SA vs. MAHLE Metal Leve | Tupy SA vs. Iochpe Maxion SA | Tupy SA vs. Banco ABC Brasil | Tupy SA vs. Cia de Ferro |
| Gafisa SA vs. Cyrela Brazil Realty | Gafisa SA vs. Rossi Residencial SA | Gafisa SA vs. MRV Engenharia e | Gafisa SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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