Correlation Between International Meal and Helbor Empreendimentos

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

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

Diversification Opportunities for International Meal and Helbor Empreendimentos

0.89

Correlation Coefficient

International Meal  Helbor Empreendimentos

Very poor diversification

The 3 months correlation between International and Helbor is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding International Meal and Helbor Empreendimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helbor Empreendimentos and International Meal 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 International Meal 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 International Meal i.e., International Meal and Helbor Empreendimentos go up and down completely randomly.

Pair Corralation between International Meal and Helbor Empreendimentos

Assuming the 90 days trading horizon International Meal is expected to generate 0.59 times more return on investment than Helbor Empreendimentos. However, International Meal is 1.71 times less risky than Helbor Empreendimentos. It trades about -0.31 of its potential returns per unit of risk. Helbor Empreendimentos SA is currently generating about -0.19 per unit of risk. If you would invest  127.00  in International Meal on September 15, 2024 and sell it today you would lose (20.00) from holding International Meal or give up 15.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

International Meal  vs.  Helbor Empreendimentos SA

International Meal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Meal 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Helbor Empreendimentos

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with International Meal and Helbor Empreendimentos

The main advantage of trading using opposite International Meal and Helbor Empreendimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Meal 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 International Meal 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.