Correlation Between HAGA SA and Refinaria

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

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

Diversification Opportunities for HAGA SA and Refinaria

-0.65

Correlation Coefficient

HAGA SA  Refinaria

Excellent diversification

The 3 months correlation between HAGA and Refinaria is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding HAGA SA Indstria and Refinaria de Petrleos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refinaria de Petrleos and HAGA 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 HAGA SA Indstria are associated (or correlated) with Refinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refinaria de Petrleos has no effect on the direction of HAGA SA i.e., HAGA SA and Refinaria go up and down completely randomly.

Pair Corralation between HAGA SA and Refinaria

Assuming the 90 days trading horizon HAGA SA Indstria is expected to generate 0.84 times more return on investment than Refinaria. However, HAGA SA Indstria is 1.2 times less risky than Refinaria. It trades about 0.01 of its potential returns per unit of risk. Refinaria de Petrleos is currently generating about 0.01 per unit of risk. If you would invest  130.00  in HAGA SA Indstria on September 12, 2024 and sell it today you would lose (1.00) from holding HAGA SA Indstria or give up 0.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.72%
Values	Daily Returns

HAGA SA Indstria  vs.  Refinaria de Petrleos

HAGA SA Indstria

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HAGA SA Indstria are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, HAGA SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Refinaria de Petrleos

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind HAGA SA Indstria and Refinaria de Petrleos 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.