Correlation Between JHSF Participaes and Helbor Empreendimentos

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

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

Diversification Opportunities for JHSF Participaes and Helbor Empreendimentos

0.93

Correlation Coefficient

JHSF Participaes  Helbor Empreendimentos

Almost no diversification

The 3 months correlation between JHSF and Helbor is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JHSF Participaes SA and Helbor Empreendimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helbor Empreendimentos and JHSF Participaes 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 JHSF Participaes SA are associated (or correlated) with Helbor Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helbor Empreendimentos has no effect on the direction of JHSF Participaes i.e., JHSF Participaes and Helbor Empreendimentos go up and down completely randomly.

Pair Corralation between JHSF Participaes and Helbor Empreendimentos

Assuming the 90 days trading horizon JHSF Participaes SA is expected to under-perform the Helbor Empreendimentos. But the stock apears to be less risky and, when comparing its historical volatility, JHSF Participaes SA is 1.63 times less risky than Helbor Empreendimentos. The stock trades about -0.02 of its potential returns per unit of risk. The Helbor Empreendimentos SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  175.00  in Helbor Empreendimentos SA on November 20, 2024 and sell it today you would lose (7.00) from holding Helbor Empreendimentos SA or give up 4.0% of portfolio value over 90 days.

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

JHSF Participaes SA  vs.  Helbor Empreendimentos SA

JHSF Participaes

Risk-Adjusted Performance

Very Weak

Over the last 90 days JHSF Participaes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, JHSF Participaes is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Helbor Empreendimentos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Helbor Empreendimentos SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Helbor Empreendimentos is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JHSF Participaes and Helbor Empreendimentos

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

The idea behind JHSF Participaes SA and Helbor Empreendimentos 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.