Correlation Between BB Seguridade and Caixa Seguridade
Can any of the company-specific risk be diversified away by investing in both BB Seguridade and Caixa Seguridade 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 BB Seguridade and Caixa Seguridade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Seguridade Participacoes and Caixa Seguridade Participaes, you can compare the effects of market volatilities on BB Seguridade and Caixa Seguridade 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 BB Seguridade with a short position of Caixa Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Seguridade and Caixa Seguridade.
Diversification Opportunities for BB Seguridade and Caixa Seguridade
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BBSE3 and Caixa is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BB Seguridade Participacoes and Caixa Seguridade Participaes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixa Seguridade Par and BB Seguridade 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 BB Seguridade Participacoes are associated (or correlated) with Caixa Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixa Seguridade Par has no effect on the direction of BB Seguridade i.e., BB Seguridade and Caixa Seguridade go up and down completely randomly.
Pair Corralation between BB Seguridade and Caixa Seguridade
Assuming the 90 days trading horizon BB Seguridade Participacoes is expected to generate 1.06 times more return on investment than Caixa Seguridade. However, BB Seguridade is 1.06 times more volatile than Caixa Seguridade Participaes. It trades about 0.14 of its potential returns per unit of risk. Caixa Seguridade Participaes is currently generating about 0.05 per unit of risk. If you would invest 3,299 in BB Seguridade Participacoes on December 3, 2024 and sell it today you would earn a total of 485.00 from holding BB Seguridade Participacoes or generate 14.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BB Seguridade Participacoes vs. Caixa Seguridade Participaes
Performance |
Timeline |
BB Seguridade Partic |
Caixa Seguridade Par |
BB Seguridade and Caixa Seguridade Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BB Seguridade and Caixa Seguridade
The main advantage of trading using opposite BB Seguridade and Caixa Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Seguridade position performs unexpectedly, Caixa Seguridade 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 Caixa Seguridade will offset losses from the drop in Caixa Seguridade's long position.BB Seguridade vs. Transmissora Aliana de | BB Seguridade vs. Banco do Brasil | BB Seguridade vs. Itasa Investimentos | BB Seguridade vs. Engie Brasil Energia |
Caixa Seguridade vs. CSN Minerao SA | Caixa Seguridade vs. BB Seguridade Participacoes | Caixa Seguridade vs. Razen SA | Caixa Seguridade vs. Vibra Energia SA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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