Correlation Between Excelsior Alimentos and JOSAPAR Joaquim

Can any of the company-specific risk be diversified away by investing in both Excelsior Alimentos and JOSAPAR Joaquim 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 JOSAPAR Joaquim 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 JOSAPAR Joaquim Oliveira, you can compare the effects of market volatilities on Excelsior Alimentos and JOSAPAR Joaquim 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 JOSAPAR Joaquim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Alimentos and JOSAPAR Joaquim.

Diversification Opportunities for Excelsior Alimentos and JOSAPAR Joaquim

0.45

Correlation Coefficient

Excelsior Alimentos  JOSAPAR Joaquim

Very weak diversification

The 3 months correlation between Excelsior and JOSAPAR is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Alimentos SA and JOSAPAR Joaquim Oliveira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOSAPAR Joaquim Oliveira 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 JOSAPAR Joaquim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOSAPAR Joaquim Oliveira has no effect on the direction of Excelsior Alimentos i.e., Excelsior Alimentos and JOSAPAR Joaquim go up and down completely randomly.

Pair Corralation between Excelsior Alimentos and JOSAPAR Joaquim

Assuming the 90 days trading horizon Excelsior Alimentos SA is expected to under-perform the JOSAPAR Joaquim. But the preferred stock apears to be less risky and, when comparing its historical volatility, Excelsior Alimentos SA is 2.48 times less risky than JOSAPAR Joaquim. The preferred stock trades about -0.01 of its potential returns per unit of risk. The JOSAPAR Joaquim Oliveira is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,048  in JOSAPAR Joaquim Oliveira on September 28, 2024 and sell it today you would earn a total of  52.00  from holding JOSAPAR Joaquim Oliveira or generate 2.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Excelsior Alimentos SA  vs.  JOSAPAR Joaquim Oliveira

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.

JOSAPAR Joaquim Oliveira

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JOSAPAR Joaquim Oliveira has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Excelsior Alimentos and JOSAPAR Joaquim

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

The idea behind Excelsior Alimentos SA and JOSAPAR Joaquim Oliveira 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.