Correlation Between Inepar SA and Hrcules SA

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

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

Diversification Opportunities for Inepar SA and Hrcules SA

-0.47

Correlation Coefficient

Inepar SA  Hrcules SA

Very good diversification

The 3 months correlation between Inepar and Hrcules is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Inepar SA Indstria and Hrcules SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hrcules SA and Inepar 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 Inepar SA Indstria are associated (or correlated) with Hrcules SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hrcules SA has no effect on the direction of Inepar SA i.e., Inepar SA and Hrcules SA go up and down completely randomly.

Pair Corralation between Inepar SA and Hrcules SA

Assuming the 90 days trading horizon Inepar SA Indstria is expected to generate 2.03 times more return on investment than Hrcules SA. However, Inepar SA is 2.03 times more volatile than Hrcules SA . It trades about 0.08 of its potential returns per unit of risk. Hrcules SA is currently generating about -0.11 per unit of risk. If you would invest  131.00  in Inepar SA Indstria on December 2, 2024 and sell it today you would earn a total of  15.00  from holding Inepar SA Indstria or generate 11.45% return on investment over 90 days.

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

Inepar SA Indstria  vs.  Hrcules SA

Inepar SA Indstria

Risk-Adjusted Performance

Modest

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

Hrcules SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hrcules SA 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 Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Inepar SA and Hrcules SA

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

The idea behind Inepar SA Indstria and Hrcules 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.