Correlation Between Hidrovias and Grupo Mateus

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

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

Diversification Opportunities for Hidrovias and Grupo Mateus

0.43

Correlation Coefficient

Hidrovias  Grupo Mateus

Very weak diversification

The 3 months correlation between Hidrovias and Grupo is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hidrovias do Brasil and Grupo Mateus SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Mateus SA and Hidrovias 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 Hidrovias do Brasil are associated (or correlated) with Grupo Mateus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Mateus SA has no effect on the direction of Hidrovias i.e., Hidrovias and Grupo Mateus go up and down completely randomly.

Pair Corralation between Hidrovias and Grupo Mateus

Assuming the 90 days trading horizon Hidrovias do Brasil is expected to under-perform the Grupo Mateus. In addition to that, Hidrovias is 1.65 times more volatile than Grupo Mateus SA. It trades about -0.16 of its total potential returns per unit of risk. Grupo Mateus SA is currently generating about -0.11 per unit of volatility. If you would invest  716.00  in Grupo Mateus SA on September 16, 2024 and sell it today you would lose (34.00) from holding Grupo Mateus SA or give up 4.75% of portfolio value over 90 days.

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

Hidrovias do Brasil  vs.  Grupo Mateus SA

Hidrovias do Brasil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hidrovias do Brasil 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 comparatively stable basic indicators, Grupo Mateus 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 Hidrovias and Grupo Mateus

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

The idea behind Hidrovias do Brasil and Grupo Mateus SA 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.