Correlation Between Grupo Mateus and Grazziotin

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

By analyzing existing cross correlation between Grupo Mateus SA and Grazziotin SA, you can compare the effects of market volatilities on Grupo Mateus and Grazziotin 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 Grupo Mateus with a short position of Grazziotin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Mateus and Grazziotin.

Diversification Opportunities for Grupo Mateus and Grazziotin

-0.5

Correlation Coefficient

Grupo Mateus  Grazziotin

Very good diversification

The 3 months correlation between Grupo and Grazziotin is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Mateus SA and Grazziotin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grazziotin SA and Grupo Mateus 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 Grupo Mateus SA are associated (or correlated) with Grazziotin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grazziotin SA has no effect on the direction of Grupo Mateus i.e., Grupo Mateus and Grazziotin go up and down completely randomly.

Pair Corralation between Grupo Mateus and Grazziotin

Assuming the 90 days trading horizon Grupo Mateus SA is expected to under-perform the Grazziotin. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Mateus SA is 1.17 times less risky than Grazziotin. The stock trades about -0.04 of its potential returns per unit of risk. The Grazziotin SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,364  in Grazziotin SA on September 26, 2024 and sell it today you would earn a total of  136.00  from holding Grazziotin SA or generate 5.75% return on investment over 90 days.

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

Grupo Mateus SA  vs.  Grazziotin SA

Grupo Mateus SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Mateus SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Grupo Mateus is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Grazziotin SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grazziotin SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Grazziotin may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Grupo Mateus and Grazziotin

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

The idea behind Grupo Mateus SA and Grazziotin SA 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.