Correlation Between Intelbras and OceanPact Servios

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

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

Diversification Opportunities for Intelbras and OceanPact Servios

0.66

Correlation Coefficient

Intelbras  OceanPact Servios

Poor diversification

The 3 months correlation between Intelbras and OceanPact is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Intelbras SA and OceanPact Servios Martimos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanPact Servios and Intelbras 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 Intelbras SA are associated (or correlated) with OceanPact Servios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanPact Servios has no effect on the direction of Intelbras i.e., Intelbras and OceanPact Servios go up and down completely randomly.

Pair Corralation between Intelbras and OceanPact Servios

Assuming the 90 days trading horizon Intelbras SA is expected to under-perform the OceanPact Servios. But the stock apears to be less risky and, when comparing its historical volatility, Intelbras SA is 1.11 times less risky than OceanPact Servios. The stock trades about -0.07 of its potential returns per unit of risk. The OceanPact Servios Martimos is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  296.00  in OceanPact Servios Martimos on October 7, 2024 and sell it today you would earn a total of  231.00  from holding OceanPact Servios Martimos or generate 78.04% return on investment over 90 days.

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

Intelbras SA   vs.  OceanPact Servios Martimos

Intelbras SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

OceanPact Servios

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Intelbras and OceanPact Servios

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

The idea behind Intelbras SA and OceanPact Servios Martimos 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.