Correlation Between Qualicorp Consultoria and Lojas Renner

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

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

Diversification Opportunities for Qualicorp Consultoria and Lojas Renner

0.2

Correlation Coefficient

Qualicorp Consultoria  Lojas Renner

Modest diversification

The 3 months correlation between Qualicorp and Lojas is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Qualicorp Consultoria e and Lojas Renner SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lojas Renner SA and Qualicorp Consultoria 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 Qualicorp Consultoria e are associated (or correlated) with Lojas Renner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lojas Renner SA has no effect on the direction of Qualicorp Consultoria i.e., Qualicorp Consultoria and Lojas Renner go up and down completely randomly.

Pair Corralation between Qualicorp Consultoria and Lojas Renner

Assuming the 90 days trading horizon Qualicorp Consultoria e is expected to under-perform the Lojas Renner. In addition to that, Qualicorp Consultoria is 1.48 times more volatile than Lojas Renner SA. It trades about -0.07 of its total potential returns per unit of risk. Lojas Renner SA is currently generating about -0.07 per unit of volatility. If you would invest  1,344  in Lojas Renner SA on December 1, 2024 and sell it today you would lose (211.00) from holding Lojas Renner SA or give up 15.7% of portfolio value over 90 days.

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

Qualicorp Consultoria e  vs.  Lojas Renner SA

Qualicorp Consultoria

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qualicorp Consultoria e has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Lojas Renner SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lojas Renner SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Qualicorp Consultoria and Lojas Renner

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

The idea behind Qualicorp Consultoria e and Lojas Renner SA 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 CEOs Directory module to screen CEOs from public companies around the world.