Correlation Between Lojas Renner and Hypera SA

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

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

Diversification Opportunities for Lojas Renner and Hypera SA

-0.13

Correlation Coefficient

Lojas Renner  Hypera SA

Good diversification

The 3 months correlation between Lojas and Hypera is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lojas Renner SA and Hypera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypera SA and Lojas Renner 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 Lojas Renner SA are associated (or correlated) with Hypera SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypera SA has no effect on the direction of Lojas Renner i.e., Lojas Renner and Hypera SA go up and down completely randomly.

Pair Corralation between Lojas Renner and Hypera SA

Assuming the 90 days trading horizon Lojas Renner is expected to generate 1.34 times less return on investment than Hypera SA. In addition to that, Lojas Renner is 2.19 times more volatile than Hypera SA. It trades about 0.05 of its total potential returns per unit of risk. Hypera SA is currently generating about 0.14 per unit of volatility. If you would invest  1,757  in Hypera SA on December 31, 2024 and sell it today you would earn a total of  219.00  from holding Hypera SA or generate 12.46% return on investment over 90 days.

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

Lojas Renner SA  vs.  Hypera SA

Lojas Renner SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lojas Renner SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lojas Renner may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Hypera SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hypera SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hypera SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lojas Renner and Hypera SA

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

The idea behind Lojas Renner SA and Hypera 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 Global Correlations module to find global opportunities by holding instruments from different markets.