Correlation Between Triunfo Participaes and Recrusul

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

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

Diversification Opportunities for Triunfo Participaes and Recrusul

-0.72

Correlation Coefficient

Triunfo Participaes  Recrusul

Pay attention - limited upside

The 3 months correlation between Triunfo and Recrusul is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Triunfo Participaes e and Recrusul SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recrusul SA and Triunfo Participaes 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 Triunfo Participaes e are associated (or correlated) with Recrusul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recrusul SA has no effect on the direction of Triunfo Participaes i.e., Triunfo Participaes and Recrusul go up and down completely randomly.

Pair Corralation between Triunfo Participaes and Recrusul

Assuming the 90 days trading horizon Triunfo Participaes is expected to generate 1.2 times less return on investment than Recrusul. But when comparing it to its historical volatility, Triunfo Participaes e is 1.48 times less risky than Recrusul. It trades about 0.04 of its potential returns per unit of risk. Recrusul SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,480  in Recrusul SA on September 23, 2024 and sell it today you would lose (1,941) from holding Recrusul SA or give up 78.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Triunfo Participaes e  vs.  Recrusul SA

Triunfo Participaes

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Triunfo Participaes e are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Triunfo Participaes unveiled solid returns over the last few months and may actually be approaching a breakup point.

Recrusul SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Recrusul SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Recrusul unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Triunfo Participaes and Recrusul

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

The idea behind Triunfo Participaes e and Recrusul 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.