Correlation Between Brpr Corporate and CM Hospitalar

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

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

Diversification Opportunities for Brpr Corporate and CM Hospitalar

-0.69

Correlation Coefficient

Brpr Corporate  CM Hospitalar

Excellent diversification

The 3 months correlation between Brpr and VVEO3 is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Brpr Corporate Offices and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar SA and Brpr Corporate 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 Brpr Corporate Offices are associated (or correlated) with CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of Brpr Corporate i.e., Brpr Corporate and CM Hospitalar go up and down completely randomly.

Pair Corralation between Brpr Corporate and CM Hospitalar

Assuming the 90 days trading horizon Brpr Corporate Offices is expected to generate 0.56 times more return on investment than CM Hospitalar. However, Brpr Corporate Offices is 1.78 times less risky than CM Hospitalar. It trades about 0.05 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.15 per unit of risk. If you would invest  4,439  in Brpr Corporate Offices on December 1, 2024 and sell it today you would earn a total of  223.00  from holding Brpr Corporate Offices or generate 5.02% return on investment over 90 days.

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

Brpr Corporate Offices  vs.  CM Hospitalar SA

Brpr Corporate Offices

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brpr Corporate Offices are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Brpr Corporate may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CM Hospitalar SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days CM Hospitalar SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Brpr Corporate and CM Hospitalar

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

The idea behind Brpr Corporate Offices and CM Hospitalar 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.