Correlation Between Mitre Realty and Dimed SA

Can any of the company-specific risk be diversified away by investing in both Mitre Realty and Dimed 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 Mitre Realty and Dimed SA 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 Dimed SA Distribuidora, you can compare the effects of market volatilities on Mitre Realty and Dimed 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 Mitre Realty with a short position of Dimed SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitre Realty and Dimed SA.

Diversification Opportunities for Mitre Realty and Dimed SA

-0.05

Correlation Coefficient

Mitre Realty  Dimed SA

Good diversification

The 3 months correlation between Mitre and Dimed is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mitre Realty Empreendimentos and Dimed SA Distribuidora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimed SA Distribuidora 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 Dimed SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimed SA Distribuidora has no effect on the direction of Mitre Realty i.e., Mitre Realty and Dimed SA go up and down completely randomly.

Pair Corralation between Mitre Realty and Dimed SA

Assuming the 90 days trading horizon Mitre Realty Empreendimentos is expected to generate 1.78 times more return on investment than Dimed SA. However, Mitre Realty is 1.78 times more volatile than Dimed SA Distribuidora. It trades about 0.14 of its potential returns per unit of risk. Dimed SA Distribuidora is currently generating about 0.03 per unit of risk. If you would invest  279.00  in Mitre Realty Empreendimentos on December 30, 2024 and sell it today you would earn a total of  66.00  from holding Mitre Realty Empreendimentos or generate 23.66% return on investment over 90 days.

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

Mitre Realty Empreendimentos  vs.  Dimed SA Distribuidora

Mitre Realty Empreen

Risk-Adjusted Performance

OK

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

Dimed SA Distribuidora

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dimed SA Distribuidora are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Dimed SA 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 Mitre Realty and Dimed SA

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

The idea behind Mitre Realty Empreendimentos and Dimed SA Distribuidora 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.