Correlation Between CCR SA and Allpark Empreendimentos

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

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

Diversification Opportunities for CCR SA and Allpark Empreendimentos

0.85

Correlation Coefficient

CCR SA  Allpark Empreendimentos

Very poor diversification

The 3 months correlation between CCR and Allpark is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CCR SA and Allpark Empreendimentos Partic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allpark Empreendimentos and CCR SA 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 CCR SA are associated (or correlated) with Allpark Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allpark Empreendimentos has no effect on the direction of CCR SA i.e., CCR SA and Allpark Empreendimentos go up and down completely randomly.

Pair Corralation between CCR SA and Allpark Empreendimentos

Assuming the 90 days trading horizon CCR SA is expected to generate 0.4 times more return on investment than Allpark Empreendimentos. However, CCR SA is 2.52 times less risky than Allpark Empreendimentos. It trades about -0.16 of its potential returns per unit of risk. Allpark Empreendimentos Participaes is currently generating about -0.07 per unit of risk. If you would invest  1,322  in CCR SA on September 2, 2024 and sell it today you would lose (219.00) from holding CCR SA or give up 16.57% of portfolio value over 90 days.

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

CCR SA  vs.  Allpark Empreendimentos Partic

CCR SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CCR 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Allpark Empreendimentos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allpark Empreendimentos Participaes 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CCR SA and Allpark Empreendimentos

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

The idea behind CCR SA and Allpark Empreendimentos Participaes 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.