Correlation Between Infracommerce CXaaS and Grupo SBF

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

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

Diversification Opportunities for Infracommerce CXaaS and Grupo SBF

0.56

Correlation Coefficient

Infracommerce CXaaS  Grupo SBF

Very weak diversification

The 3 months correlation between Infracommerce and Grupo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Infracommerce CXaaS SA and Grupo SBF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo SBF SA and Infracommerce CXaaS 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 Infracommerce CXaaS SA are associated (or correlated) with Grupo SBF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo SBF SA has no effect on the direction of Infracommerce CXaaS i.e., Infracommerce CXaaS and Grupo SBF go up and down completely randomly.

Pair Corralation between Infracommerce CXaaS and Grupo SBF

Assuming the 90 days trading horizon Infracommerce CXaaS SA is expected to generate 2.82 times more return on investment than Grupo SBF. However, Infracommerce CXaaS is 2.82 times more volatile than Grupo SBF SA. It trades about 0.15 of its potential returns per unit of risk. Grupo SBF SA is currently generating about 0.07 per unit of risk. If you would invest  6.00  in Infracommerce CXaaS SA on December 30, 2024 and sell it today you would earn a total of  5.00  from holding Infracommerce CXaaS SA or generate 83.33% return on investment over 90 days.

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

Infracommerce CXaaS SA  vs.  Grupo SBF SA

Infracommerce CXaaS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Infracommerce CXaaS SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Infracommerce CXaaS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Grupo SBF SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo SBF SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Grupo SBF unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infracommerce CXaaS and Grupo SBF

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

The idea behind Infracommerce CXaaS SA and Grupo SBF 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.