Correlation Between LACTATE NATURA and Turism Hotelur

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

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

Diversification Opportunities for LACTATE NATURA and Turism Hotelur

0.0

Correlation Coefficient

LACTATE NATURA  Turism Hotelur

Pay attention - limited upside

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

Pair Corralation between LACTATE NATURA and Turism Hotelur

If you would invest  44.00  in Turism Hotelur on October 10, 2024 and sell it today you would earn a total of  2.00  from holding Turism Hotelur or generate 4.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

LACTATE NATURA SA  vs.  Turism Hotelur

LACTATE NATURA SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LACTATE NATURA SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, LACTATE NATURA is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Turism Hotelur

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Turism Hotelur has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Turism Hotelur displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LACTATE NATURA and Turism Hotelur

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

The idea behind LACTATE NATURA SA and Turism Hotelur 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 Valuation module to check real value of public entities based on technical and fundamental data.