Correlation Between Gol Intelligent and RETAIL FOOD

Can any of the company-specific risk be diversified away by investing in both Gol Intelligent and RETAIL FOOD 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 RETAIL FOOD 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 RETAIL FOOD GROUP, you can compare the effects of market volatilities on Gol Intelligent and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Intelligent and RETAIL FOOD.

Diversification Opportunities for Gol Intelligent and RETAIL FOOD

0.0

Correlation Coefficient

Gol Intelligent  RETAIL FOOD

Pay attention - limited upside

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

Pair Corralation between Gol Intelligent and RETAIL FOOD

Assuming the 90 days trading horizon Gol Intelligent Airlines is expected to under-perform the RETAIL FOOD. In addition to that, Gol Intelligent is 2.42 times more volatile than RETAIL FOOD GROUP. It trades about -0.01 of its total potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.01 per unit of volatility. If you would invest  208.00  in RETAIL FOOD GROUP on October 4, 2024 and sell it today you would lose (65.00) from holding RETAIL FOOD GROUP or give up 31.25% of portfolio value over 90 days.

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

Gol Intelligent Airlines  vs.  RETAIL FOOD GROUP

Gol Intelligent Airlines

Risk-Adjusted Performance

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Very Weak

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.

RETAIL FOOD GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RETAIL FOOD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, RETAIL FOOD is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gol Intelligent and RETAIL FOOD

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

The idea behind Gol Intelligent Airlines and RETAIL FOOD GROUP 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.