Correlation Between Caltagirone SpA and Gol Intelligent

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

By analyzing existing cross correlation between Caltagirone SpA and Gol Intelligent Airlines, you can compare the effects of market volatilities on Caltagirone SpA and Gol Intelligent 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 Caltagirone SpA with a short position of Gol Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caltagirone SpA and Gol Intelligent.

Diversification Opportunities for Caltagirone SpA and Gol Intelligent

0.0

Correlation Coefficient

Caltagirone SpA  Gol Intelligent

Pay attention - limited upside

The 3 months correlation between Caltagirone and Gol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caltagirone SpA and Gol Intelligent Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gol Intelligent Airlines and Caltagirone SpA 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 Caltagirone SpA are associated (or correlated) with Gol Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gol Intelligent Airlines has no effect on the direction of Caltagirone SpA i.e., Caltagirone SpA and Gol Intelligent go up and down completely randomly.

Pair Corralation between Caltagirone SpA and Gol Intelligent

Assuming the 90 days trading horizon Caltagirone SpA is expected to generate 0.28 times more return on investment than Gol Intelligent. However, Caltagirone SpA is 3.63 times less risky than Gol Intelligent. It trades about 0.09 of its potential returns per unit of risk. Gol Intelligent Airlines is currently generating about 0.0 per unit of risk. If you would invest  268.00  in Caltagirone SpA on September 19, 2024 and sell it today you would earn a total of  330.00  from holding Caltagirone SpA or generate 123.13% return on investment over 90 days.

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

Caltagirone SpA  vs.  Gol Intelligent Airlines

Caltagirone SpA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caltagirone SpA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Caltagirone SpA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gol Intelligent Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Caltagirone SpA and Gol Intelligent

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

The idea behind Caltagirone SpA and Gol Intelligent Airlines 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.