Correlation Between Gol Intelligent and PICKN PAY

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

Diversification Opportunities for Gol Intelligent and PICKN PAY

0.0

Correlation Coefficient

Gol Intelligent  PICKN PAY

Pay attention - limited upside

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

Pair Corralation between Gol Intelligent and PICKN PAY

Assuming the 90 days trading horizon Gol Intelligent Airlines is expected to under-perform the PICKN PAY. In addition to that, Gol Intelligent is 2.84 times more volatile than PICKN PAY STORES. It trades about -0.02 of its total potential returns per unit of risk. PICKN PAY STORES is currently generating about 0.06 per unit of volatility. If you would invest  104.00  in PICKN PAY STORES on October 5, 2024 and sell it today you would earn a total of  50.00  from holding PICKN PAY STORES or generate 48.08% return on investment over 90 days.

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

Gol Intelligent Airlines  vs.  PICKN PAY STORES

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.

PICKN PAY STORES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PICKN PAY STORES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PICKN PAY 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 Gol Intelligent and PICKN PAY

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

The idea behind Gol Intelligent Airlines and PICKN PAY STORES 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.