Correlation Between Cyrela Brazil and Greystone Logistics

Can any of the company-specific risk be diversified away by investing in both Cyrela Brazil and Greystone Logistics 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 Cyrela Brazil and Greystone Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cyrela Brazil Realty and Greystone Logistics, you can compare the effects of market volatilities on Cyrela Brazil and Greystone Logistics 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 Cyrela Brazil with a short position of Greystone Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyrela Brazil and Greystone Logistics.

Diversification Opportunities for Cyrela Brazil and Greystone Logistics

0.59

Correlation Coefficient

Cyrela Brazil  Greystone Logistics

Very weak diversification

The 3 months correlation between Cyrela and Greystone is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cyrela Brazil Realty and Greystone Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greystone Logistics and Cyrela Brazil 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 Cyrela Brazil Realty are associated (or correlated) with Greystone Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greystone Logistics has no effect on the direction of Cyrela Brazil i.e., Cyrela Brazil and Greystone Logistics go up and down completely randomly.

Pair Corralation between Cyrela Brazil and Greystone Logistics

Assuming the 90 days horizon Cyrela Brazil Realty is expected to generate 0.8 times more return on investment than Greystone Logistics. However, Cyrela Brazil Realty is 1.26 times less risky than Greystone Logistics. It trades about -0.11 of its potential returns per unit of risk. Greystone Logistics is currently generating about -0.12 per unit of risk. If you would invest  394.00  in Cyrela Brazil Realty on September 14, 2024 and sell it today you would lose (95.00) from holding Cyrela Brazil Realty or give up 24.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cyrela Brazil Realty  vs.  Greystone Logistics

Cyrela Brazil Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyrela Brazil Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Greystone Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greystone Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Cyrela Brazil and Greystone Logistics

The main advantage of trading using opposite Cyrela Brazil and Greystone Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyrela Brazil position performs unexpectedly, Greystone Logistics 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 Greystone Logistics will offset losses from the drop in Greystone Logistics' long position.

The idea behind Cyrela Brazil Realty and Greystone Logistics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.