Correlation Between Bardella and Aeris Indstria

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

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

Diversification Opportunities for Bardella and Aeris Indstria

0.27

Correlation Coefficient

Bardella  Aeris Indstria

Modest diversification

The 3 months correlation between Bardella and Aeris is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bardella SA Indstrias and Aeris Indstria e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeris Indstria e and Bardella 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 Bardella SA Indstrias are associated (or correlated) with Aeris Indstria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeris Indstria e has no effect on the direction of Bardella i.e., Bardella and Aeris Indstria go up and down completely randomly.

Pair Corralation between Bardella and Aeris Indstria

Assuming the 90 days trading horizon Bardella is expected to generate 185.34 times less return on investment than Aeris Indstria. But when comparing it to its historical volatility, Bardella SA Indstrias is 32.15 times less risky than Aeris Indstria. It trades about 0.02 of its potential returns per unit of risk. Aeris Indstria e is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,060  in Aeris Indstria e on September 14, 2024 and sell it today you would lose (1,161) from holding Aeris Indstria e or give up 56.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Bardella SA Indstrias  vs.  Aeris Indstria e

Bardella SA Indstrias

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bardella SA Indstrias 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 Preferred 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.

Aeris Indstria e

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aeris Indstria e are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aeris Indstria unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bardella and Aeris Indstria

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

The idea behind Bardella SA Indstrias and Aeris Indstria e 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.