Correlation Between Bahema Educao and Minupar Participaes

Can any of the company-specific risk be diversified away by investing in both Bahema Educao and Minupar Participaes 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 Minupar Participaes 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 Minupar Participaes SA, you can compare the effects of market volatilities on Bahema Educao and Minupar Participaes 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 Minupar Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bahema Educao and Minupar Participaes.

Diversification Opportunities for Bahema Educao and Minupar Participaes

-0.85

Correlation Coefficient

Bahema Educao  Minupar Participaes

Pay attention - limited upside

The 3 months correlation between Bahema and Minupar is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bahema Educao SA and Minupar Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minupar Participaes 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 Minupar Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minupar Participaes has no effect on the direction of Bahema Educao i.e., Bahema Educao and Minupar Participaes go up and down completely randomly.

Pair Corralation between Bahema Educao and Minupar Participaes

Assuming the 90 days trading horizon Bahema Educao SA is expected to under-perform the Minupar Participaes. In addition to that, Bahema Educao is 1.12 times more volatile than Minupar Participaes SA. It trades about -0.07 of its total potential returns per unit of risk. Minupar Participaes SA is currently generating about 0.13 per unit of volatility. If you would invest  1,225  in Minupar Participaes SA on September 29, 2024 and sell it today you would earn a total of  875.00  from holding Minupar Participaes SA or generate 71.43% return on investment over 90 days.

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

Bahema Educao SA  vs.  Minupar Participaes SA

Bahema Educao SA

Risk-Adjusted Performance

0 of 100

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Minupar Participaes

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Minupar Participaes SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Minupar Participaes unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bahema Educao and Minupar Participaes

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

The idea behind Bahema Educao SA and Minupar Participaes 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.