Correlation Between Gafisa SA and OSX Brasil

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

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

Diversification Opportunities for Gafisa SA and OSX Brasil

-0.02

Correlation Coefficient

Gafisa SA  OSX Brasil

Good diversification

The 3 months correlation between Gafisa and OSX is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Gafisa SA and OSX Brasil SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSX Brasil SA and Gafisa 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 Gafisa SA are associated (or correlated) with OSX Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSX Brasil SA has no effect on the direction of Gafisa SA i.e., Gafisa SA and OSX Brasil go up and down completely randomly.

Pair Corralation between Gafisa SA and OSX Brasil

Assuming the 90 days trading horizon Gafisa SA is expected to under-perform the OSX Brasil. In addition to that, Gafisa SA is 1.33 times more volatile than OSX Brasil SA. It trades about -0.24 of its total potential returns per unit of risk. OSX Brasil SA is currently generating about -0.01 per unit of volatility. If you would invest  397.00  in OSX Brasil SA on September 15, 2024 and sell it today you would lose (22.00) from holding OSX Brasil SA or give up 5.54% of portfolio value over 90 days.

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

Gafisa SA  vs.  OSX Brasil SA

Gafisa SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gafisa 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.

OSX Brasil SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OSX Brasil SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, OSX Brasil 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 Gafisa SA and OSX Brasil

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

The idea behind Gafisa SA and OSX Brasil 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.