Correlation Between Vasta Platform and Arco Platform
Can any of the company-specific risk be diversified away by investing in both Vasta Platform and Arco Platform 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 Vasta Platform and Arco Platform into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vasta Platform and Arco Platform, you can compare the effects of market volatilities on Vasta Platform and Arco Platform 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 Vasta Platform with a short position of Arco Platform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vasta Platform and Arco Platform.
Diversification Opportunities for Vasta Platform and Arco Platform
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vasta and Arco is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and Arco Platform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arco Platform and Vasta Platform 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 Vasta Platform are associated (or correlated) with Arco Platform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arco Platform has no effect on the direction of Vasta Platform i.e., Vasta Platform and Arco Platform go up and down completely randomly.
Pair Corralation between Vasta Platform and Arco Platform
Given the investment horizon of 90 days Vasta Platform is expected to under-perform the Arco Platform. In addition to that, Vasta Platform is 1.13 times more volatile than Arco Platform. It trades about -0.02 of its total potential returns per unit of risk. Arco Platform is currently generating about 0.03 per unit of volatility. If you would invest 1,222 in Arco Platform on August 24, 2024 and sell it today you would earn a total of 65.00 from holding Arco Platform or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.06% |
| Values | Daily Returns |
Vasta Platform vs. Arco Platform
Performance |
| Timeline |
| Vasta Platform |
| Arco Platform |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vasta Platform and Arco Platform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vasta Platform and Arco Platform
The main advantage of trading using opposite Vasta Platform and Arco Platform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vasta Platform position performs unexpectedly, Arco Platform 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 Arco Platform will offset losses from the drop in Arco Platform's long position.| Vasta Platform vs. TAL Education Group | Vasta Platform vs. Strategic Education | Vasta Platform vs. Afya | Vasta Platform vs. Adtalem Global Education |
| Arco Platform vs. Adtalem Global Education | Arco Platform vs. American Public Education | Arco Platform vs. Laureate Education | Arco Platform vs. Grand Canyon Education |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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