Correlation Between CM Hospitalar and Livetech
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar and Livetech 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 Livetech 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 Livetech da Bahia, you can compare the effects of market volatilities on CM Hospitalar and Livetech 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 Livetech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and Livetech.
Diversification Opportunities for CM Hospitalar and Livetech
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VVEO3 and Livetech is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA and Livetech da Bahia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livetech da Bahia 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 Livetech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livetech da Bahia has no effect on the direction of CM Hospitalar i.e., CM Hospitalar and Livetech go up and down completely randomly.
Pair Corralation between CM Hospitalar and Livetech
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the Livetech. In addition to that, CM Hospitalar is 2.02 times more volatile than Livetech da Bahia. It trades about -0.14 of its total potential returns per unit of risk. Livetech da Bahia is currently generating about -0.07 per unit of volatility. If you would invest 425.00 in Livetech da Bahia on September 12, 2024 and sell it today you would lose (158.00) from holding Livetech da Bahia or give up 37.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM Hospitalar SA vs. Livetech da Bahia
Performance |
| Timeline |
| CM Hospitalar SA |
| Livetech da Bahia |
CM Hospitalar and Livetech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and Livetech
The main advantage of trading using opposite CM Hospitalar and Livetech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar position performs unexpectedly, Livetech 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 Livetech will offset losses from the drop in Livetech's long position.| CM Hospitalar vs. Fundo Investimento Imobiliario | CM Hospitalar vs. LESTE FDO INV | CM Hospitalar vs. Fras le SA | CM Hospitalar vs. Western Digital |
| Livetech vs. CM Hospitalar SA | Livetech vs. Healthpeak Properties | Livetech vs. United Rentals | Livetech vs. Metalurgica Gerdau 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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