Correlation Between NOS SGPS and Ramada Investimentos

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

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

Diversification Opportunities for NOS SGPS and Ramada Investimentos

0.33

Correlation Coefficient

NOS SGPS  Ramada Investimentos

Weak diversification

The 3 months correlation between NOS and Ramada is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding NOS SGPS SA and Ramada Investimentos e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramada Investimentos and NOS SGPS 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 NOS SGPS SA are associated (or correlated) with Ramada Investimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramada Investimentos has no effect on the direction of NOS SGPS i.e., NOS SGPS and Ramada Investimentos go up and down completely randomly.

Pair Corralation between NOS SGPS and Ramada Investimentos

Assuming the 90 days trading horizon NOS SGPS SA is expected to generate 1.64 times more return on investment than Ramada Investimentos. However, NOS SGPS is 1.64 times more volatile than Ramada Investimentos e. It trades about 0.28 of its potential returns per unit of risk. Ramada Investimentos e is currently generating about 0.18 per unit of risk. If you would invest  341.00  in NOS SGPS SA on December 5, 2024 and sell it today you would earn a total of  96.00  from holding NOS SGPS SA or generate 28.15% return on investment over 90 days.

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

NOS SGPS SA  vs.  Ramada Investimentos e

NOS SGPS SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NOS SGPS SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, NOS SGPS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ramada Investimentos

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ramada Investimentos e are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Ramada Investimentos may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NOS SGPS and Ramada Investimentos

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

The idea behind NOS SGPS SA and Ramada Investimentos e 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.