Correlation Between Minupar Participaes and Lupatech

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

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

Diversification Opportunities for Minupar Participaes and Lupatech

-0.48

Correlation Coefficient

Minupar Participaes  Lupatech

Very good diversification

The 3 months correlation between Minupar and Lupatech is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Minupar Participaes SA and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA and Minupar 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 Minupar Participaes SA 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 Minupar Participaes i.e., Minupar Participaes and Lupatech go up and down completely randomly.

Pair Corralation between Minupar Participaes and Lupatech

Assuming the 90 days trading horizon Minupar Participaes SA is expected to generate 1.17 times more return on investment than Lupatech. However, Minupar Participaes is 1.17 times more volatile than Lupatech SA. It trades about 0.11 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.4 per unit of risk. If you would invest  2,058  in Minupar Participaes SA on October 4, 2024 and sell it today you would earn a total of  81.00  from holding Minupar Participaes SA or generate 3.94% return on investment over 90 days.

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

Minupar Participaes SA  vs.  Lupatech SA

Minupar Participaes

Risk-Adjusted Performance

9 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Minupar Participaes SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Minupar Participaes unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lupatech SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lupatech 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.

Pair Trading with Minupar Participaes and Lupatech

The main advantage of trading using opposite Minupar Participaes and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minupar Participaes 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 Minupar Participaes SA 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 Commodity Directory module to find actively traded commodities issued by global exchanges.