Correlation Between Groupimo and Foncire Volta

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

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

Diversification Opportunities for Groupimo and Foncire Volta

-0.01

Correlation Coefficient

Groupimo  Foncire Volta

Good diversification

The 3 months correlation between Groupimo and Foncire is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Groupimo SA and Foncire Volta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foncire Volta and Groupimo 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 Groupimo SA are associated (or correlated) with Foncire Volta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foncire Volta has no effect on the direction of Groupimo i.e., Groupimo and Foncire Volta go up and down completely randomly.

Pair Corralation between Groupimo and Foncire Volta

Assuming the 90 days trading horizon Groupimo is expected to generate 1.9 times less return on investment than Foncire Volta. In addition to that, Groupimo is 3.66 times more volatile than Foncire Volta. It trades about 0.03 of its total potential returns per unit of risk. Foncire Volta is currently generating about 0.18 per unit of volatility. If you would invest  800.00  in Foncire Volta on December 29, 2024 and sell it today you would earn a total of  190.00  from holding Foncire Volta or generate 23.75% return on investment over 90 days.

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

Groupimo SA  vs.  Foncire Volta

Groupimo SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Groupimo SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Groupimo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Foncire Volta

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Foncire Volta are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Foncire Volta sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Groupimo and Foncire Volta

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

The idea behind Groupimo SA and Foncire Volta 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.