Correlation Between Ultrapar Participacoes and Rubis
Can any of the company-specific risk be diversified away by investing in both Ultrapar Participacoes and Rubis 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 Ultrapar Participacoes and Rubis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultrapar Participacoes SA and Rubis, you can compare the effects of market volatilities on Ultrapar Participacoes and Rubis 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 Ultrapar Participacoes with a short position of Rubis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultrapar Participacoes and Rubis.
Diversification Opportunities for Ultrapar Participacoes and Rubis
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ultrapar and Rubis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ultrapar Participacoes SA and Rubis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubis and Ultrapar Participacoes 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 Ultrapar Participacoes SA are associated (or correlated) with Rubis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubis has no effect on the direction of Ultrapar Participacoes i.e., Ultrapar Participacoes and Rubis go up and down completely randomly.
Pair Corralation between Ultrapar Participacoes and Rubis
Considering the 90-day investment horizon Ultrapar Participacoes SA is expected to generate 1.06 times more return on investment than Rubis. However, Ultrapar Participacoes is 1.06 times more volatile than Rubis. It trades about 0.03 of its potential returns per unit of risk. Rubis is currently generating about 0.0 per unit of risk. If you would invest 235.00 in Ultrapar Participacoes SA on September 12, 2024 and sell it today you would earn a total of 70.00 from holding Ultrapar Participacoes SA or generate 29.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 29.29% |
| Values | Daily Returns |
Ultrapar Participacoes SA vs. Rubis
Performance |
| Timeline |
| Ultrapar Participacoes |
| Rubis |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ultrapar Participacoes and Rubis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultrapar Participacoes and Rubis
The main advantage of trading using opposite Ultrapar Participacoes and Rubis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultrapar Participacoes position performs unexpectedly, Rubis 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 Rubis will offset losses from the drop in Rubis' long position.| Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Par Pacific Holdings | Ultrapar Participacoes vs. Delek Energy | Ultrapar Participacoes vs. Crossamerica Partners LP |
| Rubis vs. DCC PLC ADR | Rubis vs. Ultrapar Participacoes SA | Rubis vs. Sunoco LP | Rubis vs. HF Sinclair Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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