Correlation Between Mitre Realty and Lojas Quero

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

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

Diversification Opportunities for Mitre Realty and Lojas Quero

0.68

Correlation Coefficient

Mitre Realty  Lojas Quero

Poor diversification

The 3 months correlation between Mitre and Lojas is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Mitre Realty Empreendimentos and Lojas Quero Quero SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lojas Quero Quero and Mitre Realty 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 Mitre Realty Empreendimentos are associated (or correlated) with Lojas Quero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lojas Quero Quero has no effect on the direction of Mitre Realty i.e., Mitre Realty and Lojas Quero go up and down completely randomly.

Pair Corralation between Mitre Realty and Lojas Quero

Assuming the 90 days trading horizon Mitre Realty Empreendimentos is expected to generate 0.67 times more return on investment than Lojas Quero. However, Mitre Realty Empreendimentos is 1.5 times less risky than Lojas Quero. It trades about -0.03 of its potential returns per unit of risk. Lojas Quero Quero SA is currently generating about -0.03 per unit of risk. If you would invest  328.00  in Mitre Realty Empreendimentos on December 2, 2024 and sell it today you would lose (24.00) from holding Mitre Realty Empreendimentos or give up 7.32% of portfolio value over 90 days.

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

Mitre Realty Empreendimentos  vs.  Lojas Quero Quero SA

Mitre Realty Empreen

Risk-Adjusted Performance

Very Weak

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

Lojas Quero Quero

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lojas Quero Quero SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Mitre Realty and Lojas Quero

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

The idea behind Mitre Realty Empreendimentos and Lojas Quero Quero 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.