Correlation Between SIMPAR SA and Schulz SA
Can any of the company-specific risk be diversified away by investing in both SIMPAR SA and Schulz 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 SIMPAR SA and Schulz SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMPAR SA and Schulz SA, you can compare the effects of market volatilities on SIMPAR SA and Schulz 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 SIMPAR SA with a short position of Schulz SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMPAR SA and Schulz SA.
Diversification Opportunities for SIMPAR SA and Schulz SA
Poor diversification
The 3 months correlation between SIMPAR and Schulz is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SIMPAR SA and Schulz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schulz SA and SIMPAR SA 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 SIMPAR SA are associated (or correlated) with Schulz SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schulz SA has no effect on the direction of SIMPAR SA i.e., SIMPAR SA and Schulz SA go up and down completely randomly.
Pair Corralation between SIMPAR SA and Schulz SA
Assuming the 90 days trading horizon SIMPAR SA is expected to under-perform the Schulz SA. In addition to that, SIMPAR SA is 2.62 times more volatile than Schulz SA. It trades about -0.14 of its total potential returns per unit of risk. Schulz SA is currently generating about -0.07 per unit of volatility. If you would invest 616.00 in Schulz SA on September 24, 2024 and sell it today you would lose (45.00) from holding Schulz SA or give up 7.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SIMPAR SA vs. Schulz SA
Performance |
Timeline |
SIMPAR SA |
Schulz SA |
SIMPAR SA and Schulz SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SIMPAR SA and Schulz SA
The main advantage of trading using opposite SIMPAR SA and Schulz SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMPAR SA position performs unexpectedly, Schulz 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 Schulz SA will offset losses from the drop in Schulz SA's long position.SIMPAR SA vs. Ambipar Participaes e | SIMPAR SA vs. Vamos Locao de | SIMPAR SA vs. Movida Participaes SA | SIMPAR SA vs. Petro Rio SA |
Schulz SA vs. PBG SA | Schulz SA vs. Movida Participaes SA | Schulz SA vs. Tupy SA | Schulz SA vs. Petro Rio SA |
Check out your portfolio center.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.
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