Correlation Between Cogna Educacao and Tarena Intl

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

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

Diversification Opportunities for Cogna Educacao and Tarena Intl

0.0

Correlation Coefficient

Cogna Educacao  Tarena Intl

Pay attention - limited upside

The 3 months correlation between Cogna and Tarena is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cogna Educacao SA and Tarena Intl Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tarena Intl Adr and Cogna Educacao 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 Cogna Educacao SA are associated (or correlated) with Tarena Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tarena Intl Adr has no effect on the direction of Cogna Educacao i.e., Cogna Educacao and Tarena Intl go up and down completely randomly.

Pair Corralation between Cogna Educacao and Tarena Intl

If you would invest  19.00  in Cogna Educacao SA on December 28, 2024 and sell it today you would earn a total of  11.00  from holding Cogna Educacao SA or generate 57.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cogna Educacao SA  vs.  Tarena Intl Adr

Cogna Educacao SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cogna Educacao SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Cogna Educacao showed solid returns over the last few months and may actually be approaching a breakup point.

Tarena Intl Adr

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tarena Intl Adr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Tarena Intl is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cogna Educacao and Tarena Intl

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

The idea behind Cogna Educacao SA and Tarena Intl Adr 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 Commodity Directory module to find actively traded commodities issued by global exchanges.