Correlation Between Aeris Indstria and Recrusul

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

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

Diversification Opportunities for Aeris Indstria and Recrusul

0.78

Correlation Coefficient

Aeris Indstria  Recrusul

Poor diversification

The 3 months correlation between Aeris and Recrusul is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Indstria e and Recrusul SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recrusul SA and Aeris Indstria 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 Aeris Indstria 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 Aeris Indstria i.e., Aeris Indstria and Recrusul go up and down completely randomly.

Pair Corralation between Aeris Indstria and Recrusul

Assuming the 90 days trading horizon Aeris Indstria e is expected to generate 1.47 times more return on investment than Recrusul. However, Aeris Indstria is 1.47 times more volatile than Recrusul SA. It trades about -0.01 of its potential returns per unit of risk. Recrusul SA is currently generating about -0.06 per unit of risk. If you would invest  861.00  in Aeris Indstria e on September 13, 2024 and sell it today you would lose (181.00) from holding Aeris Indstria e or give up 21.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Aeris Indstria e  vs.  Recrusul SA

Aeris Indstria e

Risk-Adjusted Performance

0 of 100

Very Weak

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

Recrusul SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Recrusul 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.

Pair Trading with Aeris Indstria and Recrusul

The main advantage of trading using opposite Aeris Indstria and Recrusul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Indstria 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 Aeris Indstria 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.