Correlation Between Vivara Participaes and Marisa Lojas
Can any of the company-specific risk be diversified away by investing in both Vivara Participaes and Marisa Lojas 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 Vivara Participaes and Marisa Lojas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vivara Participaes SA and Marisa Lojas SA, you can compare the effects of market volatilities on Vivara Participaes and Marisa Lojas 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 Vivara Participaes with a short position of Marisa Lojas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivara Participaes and Marisa Lojas.
Diversification Opportunities for Vivara Participaes and Marisa Lojas
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vivara and Marisa is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vivara Participaes SA and Marisa Lojas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marisa Lojas SA and Vivara Participaes 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 Vivara Participaes SA are associated (or correlated) with Marisa Lojas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marisa Lojas SA has no effect on the direction of Vivara Participaes i.e., Vivara Participaes and Marisa Lojas go up and down completely randomly.
Pair Corralation between Vivara Participaes and Marisa Lojas
Assuming the 90 days trading horizon Vivara Participaes SA is expected to under-perform the Marisa Lojas. But the stock apears to be less risky and, when comparing its historical volatility, Vivara Participaes SA is 1.1 times less risky than Marisa Lojas. The stock trades about -0.24 of its potential returns per unit of risk. The Marisa Lojas SA is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 96.00 in Marisa Lojas SA on August 31, 2024 and sell it today you would lose (5.00) from holding Marisa Lojas SA or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vivara Participaes SA vs. Marisa Lojas SA
Performance |
| Timeline |
| Vivara Participaes |
| Marisa Lojas SA |
Vivara Participaes and Marisa Lojas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vivara Participaes and Marisa Lojas
The main advantage of trading using opposite Vivara Participaes and Marisa Lojas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivara Participaes position performs unexpectedly, Marisa Lojas 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 Marisa Lojas will offset losses from the drop in Marisa Lojas' long position.| Vivara Participaes vs. Lojas Renner SA | Vivara Participaes vs. Fleury SA | Vivara Participaes vs. Movida Participaes SA | Vivara Participaes vs. Localiza Rent a |
| Marisa Lojas vs. Lojas Renner SA | Marisa Lojas vs. Guararapes Confeces SA | Marisa Lojas vs. CA Modas SA | Marisa Lojas vs. Minerva 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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