Correlation Between Dimed SA and Cury Construtora

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

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

Diversification Opportunities for Dimed SA and Cury Construtora

-0.34

Correlation Coefficient

Dimed SA  Cury Construtora

Very good diversification

The 3 months correlation between Dimed and Cury is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dimed SA Distribuidora and Cury Construtora e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cury Construtora e and Dimed SA 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 Dimed SA Distribuidora are associated (or correlated) with Cury Construtora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cury Construtora e has no effect on the direction of Dimed SA i.e., Dimed SA and Cury Construtora go up and down completely randomly.

Pair Corralation between Dimed SA and Cury Construtora

Assuming the 90 days trading horizon Dimed SA Distribuidora is expected to under-perform the Cury Construtora. But the stock apears to be less risky and, when comparing its historical volatility, Dimed SA Distribuidora is 1.36 times less risky than Cury Construtora. The stock trades about -0.12 of its potential returns per unit of risk. The Cury Construtora e is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,976  in Cury Construtora e on December 1, 2024 and sell it today you would earn a total of  145.00  from holding Cury Construtora e or generate 7.34% return on investment over 90 days.

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

Dimed SA Distribuidora  vs.  Cury Construtora e

Dimed SA Distribuidora

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dimed SA Distribuidora 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.

Cury Construtora e

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cury Construtora e are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cury Construtora may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dimed SA and Cury Construtora

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

The idea behind Dimed SA Distribuidora and Cury Construtora 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.