Correlation Between LACTATE NATURA and Promateris

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

Diversification Opportunities for LACTATE NATURA and Promateris

0.0

Correlation Coefficient

LACTATE NATURA  Promateris

Pay attention - limited upside

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

Pair Corralation between LACTATE NATURA and Promateris

If you would invest  0.00  in LACTATE NATURA SA on December 23, 2024 and sell it today you would earn a total of  0.00  from holding LACTATE NATURA SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.75%
Values	Daily Returns

LACTATE NATURA SA  vs.  Promateris SA

LACTATE NATURA SA

Risk-Adjusted Performance

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 current stock price disarray, may contribute to short-term losses for the investors.

Promateris SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Promateris SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with LACTATE NATURA and Promateris

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

The idea behind LACTATE NATURA SA and Promateris 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.