Correlation Between CM Hospitalar and Plano Plano
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar and Plano Plano 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 Plano Plano 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 Plano Plano Desenvolvimento, you can compare the effects of market volatilities on CM Hospitalar and Plano Plano 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 Plano Plano. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and Plano Plano.
Diversification Opportunities for CM Hospitalar and Plano Plano
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VVEO3 and Plano is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA and Plano Plano Desenvolvimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plano Plano Desenvol 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 Plano Plano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plano Plano Desenvol has no effect on the direction of CM Hospitalar i.e., CM Hospitalar and Plano Plano go up and down completely randomly.
Pair Corralation between CM Hospitalar and Plano Plano
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the Plano Plano. In addition to that, CM Hospitalar is 1.2 times more volatile than Plano Plano Desenvolvimento. It trades about -0.1 of its total potential returns per unit of risk. Plano Plano Desenvolvimento is currently generating about 0.06 per unit of volatility. If you would invest 434.00 in Plano Plano Desenvolvimento on October 25, 2024 and sell it today you would earn a total of 499.00 from holding Plano Plano Desenvolvimento or generate 114.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM Hospitalar SA vs. Plano Plano Desenvolvimento
Performance |
| Timeline |
| CM Hospitalar SA |
| Plano Plano Desenvol |
CM Hospitalar and Plano Plano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and Plano Plano
The main advantage of trading using opposite CM Hospitalar and Plano Plano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar position performs unexpectedly, Plano Plano 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 Plano Plano will offset losses from the drop in Plano Plano's long position.| CM Hospitalar vs. Profarma Distribuidora de | CM Hospitalar vs. Datadog, | CM Hospitalar vs. Energisa SA | CM Hospitalar vs. BTG Pactual Logstica |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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