Correlation Between Ramada Investimentos and NOS SGPS

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

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

Diversification Opportunities for Ramada Investimentos and NOS SGPS

-0.68

Correlation Coefficient

Ramada Investimentos  NOS SGPS

Excellent diversification

The 3 months correlation between Ramada and NOS is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ramada Investimentos e and NOS SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOS SGPS SA and Ramada Investimentos 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 Ramada Investimentos e are associated (or correlated) with NOS SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOS SGPS SA has no effect on the direction of Ramada Investimentos i.e., Ramada Investimentos and NOS SGPS go up and down completely randomly.

Pair Corralation between Ramada Investimentos and NOS SGPS

Assuming the 90 days trading horizon Ramada Investimentos e is expected to under-perform the NOS SGPS. In addition to that, Ramada Investimentos is 3.22 times more volatile than NOS SGPS SA. It trades about -0.09 of its total potential returns per unit of risk. NOS SGPS SA is currently generating about -0.15 per unit of volatility. If you would invest  346.00  in NOS SGPS SA on September 16, 2024 and sell it today you would lose (8.00) from holding NOS SGPS SA or give up 2.31% of portfolio value over 90 days.

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

Ramada Investimentos e  vs.  NOS SGPS SA

Ramada Investimentos

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ramada Investimentos e are ranked lower than 5 (%) 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 January 2025.

NOS SGPS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOS SGPS SA 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 Ramada Investimentos and NOS SGPS

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

The idea behind Ramada Investimentos e and NOS SGPS 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.