Correlation Between STELLA-JONES INC and Corticeira Amorim

Can any of the company-specific risk be diversified away by investing in both STELLA-JONES INC and Corticeira Amorim 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 STELLA-JONES INC and Corticeira Amorim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between STELLA JONES INC and Corticeira Amorim SGPS, you can compare the effects of market volatilities on STELLA-JONES INC and Corticeira Amorim 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 STELLA-JONES INC with a short position of Corticeira Amorim. Check out your portfolio center. Please also check ongoing floating volatility patterns of STELLA-JONES INC and Corticeira Amorim.

Diversification Opportunities for STELLA-JONES INC and Corticeira Amorim

0.0

Correlation Coefficient

STELLA-JONES INC  Corticeira Amorim

Pay attention - limited upside

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

Pair Corralation between STELLA-JONES INC and Corticeira Amorim

If you would invest  795.00  in Corticeira Amorim SGPS on December 28, 2024 and sell it today you would earn a total of  1.00  from holding Corticeira Amorim SGPS or generate 0.13% return on investment over 90 days.

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

STELLA JONES INC  vs.  Corticeira Amorim SGPS

STELLA JONES INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days STELLA JONES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, STELLA-JONES INC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Corticeira Amorim SGPS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corticeira Amorim SGPS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Corticeira Amorim is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with STELLA-JONES INC and Corticeira Amorim

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

The idea behind STELLA JONES INC and Corticeira Amorim SGPS 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.