Correlation Between Grupo Mateus and Hapvida Participaes

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

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

Diversification Opportunities for Grupo Mateus and Hapvida Participaes

0.74

Correlation Coefficient

Grupo Mateus  Hapvida Participaes

Poor diversification

The 3 months correlation between Grupo and Hapvida is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Mateus SA and Hapvida Participaes e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapvida Participaes and Grupo Mateus 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 Grupo Mateus SA are associated (or correlated) with Hapvida Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapvida Participaes has no effect on the direction of Grupo Mateus i.e., Grupo Mateus and Hapvida Participaes go up and down completely randomly.

Pair Corralation between Grupo Mateus and Hapvida Participaes

Assuming the 90 days trading horizon Grupo Mateus SA is expected to generate 0.53 times more return on investment than Hapvida Participaes. However, Grupo Mateus SA is 1.89 times less risky than Hapvida Participaes. It trades about -0.13 of its potential returns per unit of risk. Hapvida Participaes e is currently generating about -0.19 per unit of risk. If you would invest  740.00  in Grupo Mateus SA on October 23, 2024 and sell it today you would lose (125.00) from holding Grupo Mateus SA or give up 16.89% of portfolio value over 90 days.

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

Grupo Mateus SA  vs.  Hapvida Participaes e

Grupo Mateus SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hapvida Participaes

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Grupo Mateus and Hapvida Participaes

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

The idea behind Grupo Mateus SA and Hapvida Participaes e 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.