Correlation Between Nasdaq and Cia Brasileira

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

By analyzing existing cross correlation between Nasdaq Inc and Cia Brasileira de, you can compare the effects of market volatilities on Nasdaq and Cia Brasileira 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 Nasdaq with a short position of Cia Brasileira. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Cia Brasileira.

Diversification Opportunities for Nasdaq and Cia Brasileira

0.28

Correlation Coefficient

Nasdaq  Cia Brasileira

Modest diversification

The 3 months correlation between Nasdaq and Cia is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Cia Brasileira de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cia Brasileira de and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Cia Brasileira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cia Brasileira de has no effect on the direction of Nasdaq i.e., Nasdaq and Cia Brasileira go up and down completely randomly.

Pair Corralation between Nasdaq and Cia Brasileira

Given the investment horizon of 90 days Nasdaq is expected to generate 7.26 times less return on investment than Cia Brasileira. But when comparing it to its historical volatility, Nasdaq Inc is 2.53 times less risky than Cia Brasileira. It trades about 0.06 of its potential returns per unit of risk. Cia Brasileira de is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  475.00  in Cia Brasileira de on October 22, 2024 and sell it today you would earn a total of  37.00  from holding Cia Brasileira de or generate 7.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.47%
Values	Daily Returns

Nasdaq Inc  vs.  Cia Brasileira de

Nasdaq Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cia Brasileira de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cia Brasileira de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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 Nasdaq and Cia Brasileira

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

The idea behind Nasdaq Inc and Cia Brasileira de 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.