Correlation Between Elevance Health, and Fica Empreendimentos

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

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

Diversification Opportunities for Elevance Health, and Fica Empreendimentos

0.49

Correlation Coefficient

Elevance Health,  Fica Empreendimentos

Very weak diversification

The 3 months correlation between Elevance and Fica is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health, and Fica Empreendimentos Imobiliar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fica Empreendimentos and Elevance Health, 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 Elevance Health, are associated (or correlated) with Fica Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fica Empreendimentos has no effect on the direction of Elevance Health, i.e., Elevance Health, and Fica Empreendimentos go up and down completely randomly.

Pair Corralation between Elevance Health, and Fica Empreendimentos

Assuming the 90 days trading horizon Elevance Health, is expected to under-perform the Fica Empreendimentos. But the stock apears to be less risky and, when comparing its historical volatility, Elevance Health, is 1.62 times less risky than Fica Empreendimentos. The stock trades about -0.09 of its potential returns per unit of risk. The Fica Empreendimentos Imobiliarios is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  910.00  in Fica Empreendimentos Imobiliarios on December 24, 2024 and sell it today you would lose (25.00) from holding Fica Empreendimentos Imobiliarios or give up 2.75% of portfolio value over 90 days.

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

Elevance Health,  vs.  Fica Empreendimentos Imobiliar

Elevance Health,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elevance Health, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Fica Empreendimentos

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Elevance Health, and Fica Empreendimentos

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

The idea behind Elevance Health, and Fica Empreendimentos Imobiliarios 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.