Correlation Between Gol Intelligent and IMPERIAL TOBACCO

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Can any of the company-specific risk be diversified away by investing in both Gol Intelligent and IMPERIAL TOBACCO 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 Gol Intelligent and IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gol Intelligent Airlines and IMPERIAL TOBACCO , you can compare the effects of market volatilities on Gol Intelligent and IMPERIAL TOBACCO 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 Gol Intelligent with a short position of IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Intelligent and IMPERIAL TOBACCO.

Diversification Opportunities for Gol Intelligent and IMPERIAL TOBACCO

GolIMPERIALDiversified AwayGolIMPERIALDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Gol Intelligent and IMPERIAL TOBACCO

If you would invest  2,897  in IMPERIAL TOBACCO on November 19, 2024 and sell it today you would earn a total of  461.00  from holding IMPERIAL TOBACCO or generate 15.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy98.33%
ValuesDaily Returns

Gol Intelligent Airlines  vs.  IMPERIAL TOBACCO

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 05101520
JavaScript chart by amCharts 3.21.15GOQN ITB
       Timeline  
Gol Intelligent Airlines 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Gol Intelligent Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gol Intelligent is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.420.425
IMPERIAL TOBACCO 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in IMPERIAL TOBACCO are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, IMPERIAL TOBACCO unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb293031323334

Gol Intelligent and IMPERIAL TOBACCO Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.10.20.30.4
JavaScript chart by amCharts 3.21.15GOQN ITB
       Returns  

Pair Trading with Gol Intelligent and IMPERIAL TOBACCO

The main advantage of trading using opposite Gol Intelligent and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gol Intelligent position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.
The idea behind Gol Intelligent Airlines and IMPERIAL TOBACCO 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 Channel module to use Commodity Channel Index to analyze current equity momentum.

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