Correlation Between Cruzeiro and Mobly SA

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

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

Diversification Opportunities for Cruzeiro and Mobly SA

0.55

Correlation Coefficient

Cruzeiro  Mobly SA

Very weak diversification

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

Pair Corralation between Cruzeiro and Mobly SA

Assuming the 90 days trading horizon Cruzeiro do Sul is expected to generate 0.81 times more return on investment than Mobly SA. However, Cruzeiro do Sul is 1.24 times less risky than Mobly SA. It trades about 0.01 of its potential returns per unit of risk. Mobly SA is currently generating about -0.02 per unit of risk. If you would invest  356.00  in Cruzeiro do Sul on October 3, 2024 and sell it today you would lose (36.00) from holding Cruzeiro do Sul or give up 10.11% of portfolio value over 90 days.

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

Cruzeiro do Sul  vs.  Mobly SA

Cruzeiro do Sul

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cruzeiro do Sul are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cruzeiro is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Mobly SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cruzeiro and Mobly SA

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

The idea behind Cruzeiro do Sul and Mobly 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.