Correlation Between CM Hospitalar and JSL SA
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar and JSL 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 CM Hospitalar and JSL SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM Hospitalar SA and JSL SA, you can compare the effects of market volatilities on CM Hospitalar and JSL 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 CM Hospitalar with a short position of JSL SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and JSL SA.
Diversification Opportunities for CM Hospitalar and JSL SA
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between VVEO3 and JSL is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA and JSL SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSL SA and CM Hospitalar 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 CM Hospitalar SA are associated (or correlated) with JSL SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSL SA has no effect on the direction of CM Hospitalar i.e., CM Hospitalar and JSL SA go up and down completely randomly.
Pair Corralation between CM Hospitalar and JSL SA
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the JSL SA. In addition to that, CM Hospitalar is 1.53 times more volatile than JSL SA. It trades about -0.13 of its total potential returns per unit of risk. JSL SA is currently generating about -0.01 per unit of volatility. If you would invest 875.00 in JSL SA on September 2, 2024 and sell it today you would lose (197.00) from holding JSL SA or give up 22.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
CM Hospitalar SA vs. JSL SA
Performance |
| Timeline |
| CM Hospitalar SA |
| JSL SA |
CM Hospitalar and JSL SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and JSL SA
The main advantage of trading using opposite CM Hospitalar and JSL SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar position performs unexpectedly, JSL 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 JSL SA will offset losses from the drop in JSL SA's long position.| CM Hospitalar vs. Profarma Distribuidora de | CM Hospitalar vs. Fras le SA | CM Hospitalar vs. Western Digital | CM Hospitalar vs. Energisa SA |
| JSL SA vs. METISA Metalrgica Timboense | JSL SA vs. Lupatech SA | JSL SA vs. Fras le SA | JSL SA vs. Energisa 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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