Correlation Between Gol Linhas and PBG SA

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

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

Diversification Opportunities for Gol Linhas and PBG SA

0.0

Correlation Coefficient

Gol Linhas  PBG SA

Pay attention - limited upside

The 3 months correlation between Gol and PBG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gol Linhas Areas and PBG SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBG SA and Gol Linhas 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 Gol Linhas Areas are associated (or correlated) with PBG SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBG SA has no effect on the direction of Gol Linhas i.e., Gol Linhas and PBG SA go up and down completely randomly.

Pair Corralation between Gol Linhas and PBG SA

If you would invest  104.00  in Gol Linhas Areas on September 3, 2024 and sell it today you would earn a total of  30.00  from holding Gol Linhas Areas or generate 28.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gol Linhas Areas  vs.  PBG SA

Gol Linhas Areas

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gol Linhas Areas are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Gol Linhas unveiled solid returns over the last few months and may actually be approaching a breakup point.

PBG SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PBG SA 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Gol Linhas and PBG SA

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

The idea behind Gol Linhas Areas and PBG 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.