Correlation Between Bahema Educao and Centro De

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

By analyzing existing cross correlation between Bahema Educao SA and Centro de Imagem, you can compare the effects of market volatilities on Bahema Educao and Centro De 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 Bahema Educao with a short position of Centro De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bahema Educao and Centro De.

Diversification Opportunities for Bahema Educao and Centro De

0.01

Correlation Coefficient

Bahema Educao  Centro De

Significant diversification

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

Pair Corralation between Bahema Educao and Centro De

Assuming the 90 days trading horizon Bahema Educao SA is expected to under-perform the Centro De. But the stock apears to be less risky and, when comparing its historical volatility, Bahema Educao SA is 1.09 times less risky than Centro De. The stock trades about -0.13 of its potential returns per unit of risk. The Centro de Imagem is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,071  in Centro de Imagem on December 4, 2024 and sell it today you would earn a total of  89.00  from holding Centro de Imagem or generate 8.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

Bahema Educao SA  vs.  Centro de Imagem

Bahema Educao SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bahema Educao SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Centro de Imagem

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Centro de Imagem are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Centro De unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bahema Educao and Centro De

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

The idea behind Bahema Educao SA and Centro de Imagem 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.