Correlation Between Excelsior Alimentos and Grazziotin

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

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

Diversification Opportunities for Excelsior Alimentos and Grazziotin

-0.35

Correlation Coefficient

Excelsior Alimentos  Grazziotin

Very good diversification

The 3 months correlation between Excelsior and Grazziotin is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Alimentos SA and Grazziotin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grazziotin SA and Excelsior Alimentos 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 Excelsior Alimentos SA are associated (or correlated) with Grazziotin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grazziotin SA has no effect on the direction of Excelsior Alimentos i.e., Excelsior Alimentos and Grazziotin go up and down completely randomly.

Pair Corralation between Excelsior Alimentos and Grazziotin

Assuming the 90 days trading horizon Excelsior Alimentos SA is expected to under-perform the Grazziotin. But the preferred stock apears to be less risky and, when comparing its historical volatility, Excelsior Alimentos SA is 7.63 times less risky than Grazziotin. The preferred stock trades about -0.08 of its potential returns per unit of risk. The Grazziotin SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,363  in Grazziotin SA on September 30, 2024 and sell it today you would earn a total of  287.00  from holding Grazziotin SA or generate 12.15% return on investment over 90 days.

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

Excelsior Alimentos SA  vs.  Grazziotin SA

Excelsior Alimentos

Risk-Adjusted Performance

0 of 100

Very Weak

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

Grazziotin SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grazziotin SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Grazziotin unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Excelsior Alimentos and Grazziotin

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

The idea behind Excelsior Alimentos SA and Grazziotin 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 Transaction History module to view history of all your transactions and understand their impact on performance.