Correlation Between Camil Alimentos and Grendene

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

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

Diversification Opportunities for Camil Alimentos and Grendene

-0.55

Correlation Coefficient

Camil Alimentos  Grendene

Excellent diversification

The 3 months correlation between Camil and Grendene is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Camil Alimentos SA and Grendene SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grendene SA and Camil 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 Camil Alimentos SA are associated (or correlated) with Grendene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grendene SA has no effect on the direction of Camil Alimentos i.e., Camil Alimentos and Grendene go up and down completely randomly.

Pair Corralation between Camil Alimentos and Grendene

Assuming the 90 days trading horizon Camil Alimentos SA is expected to under-perform the Grendene. In addition to that, Camil Alimentos is 1.45 times more volatile than Grendene SA. It trades about -0.13 of its total potential returns per unit of risk. Grendene SA is currently generating about -0.01 per unit of volatility. If you would invest  596.00  in Grendene SA on December 4, 2024 and sell it today you would lose (37.00) from holding Grendene SA or give up 6.21% of portfolio value over 90 days.

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

Camil Alimentos SA  vs.  Grendene SA

Camil Alimentos SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Camil Alimentos SA 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 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.

Grendene SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grendene SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Grendene may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Camil Alimentos and Grendene

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

The idea behind Camil Alimentos SA and Grendene 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.