Correlation Between Padtec Holding and Intelbras

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

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

Diversification Opportunities for Padtec Holding and Intelbras

0.87

Correlation Coefficient

Padtec Holding  Intelbras

Very poor diversification

The 3 months correlation between Padtec and Intelbras is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Padtec Holding SA and Intelbras SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelbras SA and Padtec Holding 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 Padtec Holding SA are associated (or correlated) with Intelbras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelbras SA has no effect on the direction of Padtec Holding i.e., Padtec Holding and Intelbras go up and down completely randomly.

Pair Corralation between Padtec Holding and Intelbras

Assuming the 90 days trading horizon Padtec Holding SA is expected to generate 1.42 times more return on investment than Intelbras. However, Padtec Holding is 1.42 times more volatile than Intelbras SA . It trades about -0.22 of its potential returns per unit of risk. Intelbras SA is currently generating about -0.34 per unit of risk. If you would invest  186.00  in Padtec Holding SA on September 12, 2024 and sell it today you would lose (61.00) from holding Padtec Holding SA or give up 32.8% of portfolio value over 90 days.

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

Padtec Holding SA  vs.  Intelbras SA

Padtec Holding SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Padtec Holding 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.

Intelbras SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelbras 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.

Pair Trading with Padtec Holding and Intelbras

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

The idea behind Padtec Holding SA and Intelbras 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.