Correlation Between Kepler Weber and Oi SA

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

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

Diversification Opportunities for Kepler Weber and Oi SA

0.45

Correlation Coefficient

Kepler Weber  Oi SA

Very weak diversification

The 3 months correlation between Kepler and OIBR4 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kepler Weber SA and Oi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oi SA and Kepler Weber 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 Kepler Weber SA are associated (or correlated) with Oi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oi SA has no effect on the direction of Kepler Weber i.e., Kepler Weber and Oi SA go up and down completely randomly.

Pair Corralation between Kepler Weber and Oi SA

Assuming the 90 days trading horizon Kepler Weber SA is expected to under-perform the Oi SA. But the stock apears to be less risky and, when comparing its historical volatility, Kepler Weber SA is 2.43 times less risky than Oi SA. The stock trades about -0.12 of its potential returns per unit of risk. The Oi SA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,195  in Oi SA on September 4, 2024 and sell it today you would lose (145.00) from holding Oi SA or give up 12.13% of portfolio value over 90 days.

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

Kepler Weber SA  vs.  Oi SA

Kepler Weber SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kepler Weber SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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.

Oi SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kepler Weber and Oi SA

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

The idea behind Kepler Weber SA and Oi 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.