Correlation Between Randon SA and Pettenati

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

By analyzing existing cross correlation between Randon SA Implementos and Pettenati SA Industria, you can compare the effects of market volatilities on Randon SA and Pettenati 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 Randon SA with a short position of Pettenati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Randon SA and Pettenati.

Diversification Opportunities for Randon SA and Pettenati

0.53

Correlation Coefficient

Randon SA  Pettenati

Very weak diversification

The 3 months correlation between Randon and Pettenati is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Randon SA Implementos and Pettenati SA Industria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pettenati SA Industria and Randon 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 Randon SA Implementos are associated (or correlated) with Pettenati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pettenati SA Industria has no effect on the direction of Randon SA i.e., Randon SA and Pettenati go up and down completely randomly.

Pair Corralation between Randon SA and Pettenati

Assuming the 90 days trading horizon Randon SA is expected to generate 6.24 times less return on investment than Pettenati. In addition to that, Randon SA is 1.28 times more volatile than Pettenati SA Industria. It trades about 0.03 of its total potential returns per unit of risk. Pettenati SA Industria is currently generating about 0.25 per unit of volatility. If you would invest  584.00  in Pettenati SA Industria on December 25, 2024 and sell it today you would earn a total of  176.00  from holding Pettenati SA Industria or generate 30.14% return on investment over 90 days.

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

Randon SA Implementos  vs.  Pettenati SA Industria

Randon SA Implementos

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Randon SA Implementos are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Randon SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pettenati SA Industria

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pettenati SA Industria are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Pettenati unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Randon SA and Pettenati

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

The idea behind Randon SA Implementos and Pettenati SA Industria 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 Global Correlations module to find global opportunities by holding instruments from different markets.