Correlation Between Inepar SA and Lupatech

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

Diversification Opportunities for Inepar SA and Lupatech

0.15

Correlation Coefficient

Inepar SA  Lupatech

Average diversification

The 3 months correlation between Inepar and Lupatech is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Inepar SA Indstria and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech 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 Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Inepar SA i.e., Inepar SA and Lupatech go up and down completely randomly.

Pair Corralation between Inepar SA and Lupatech

Assuming the 90 days trading horizon Inepar SA Indstria is expected to generate 1.21 times more return on investment than Lupatech. However, Inepar SA is 1.21 times more volatile than Lupatech SA. It trades about 0.06 of its potential returns per unit of risk. Lupatech SA is currently generating about 0.07 per unit of risk. If you would invest  131.00  in Inepar SA Indstria on December 29, 2024 and sell it today you would earn a total of  13.00  from holding Inepar SA Indstria or generate 9.92% return on investment over 90 days.

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

Inepar SA Indstria  vs.  Lupatech SA

Inepar SA Indstria

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inepar SA Indstria are ranked lower than 4 (%) 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.

Lupatech SA

Risk-Adjusted Performance

Modest

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

Pair Trading with Inepar SA and Lupatech

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

The idea behind Inepar SA Indstria and Lupatech 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.