Correlation Between Randon SA and Positivo Tecnologia

Can any of the company-specific risk be diversified away by investing in both Randon SA and Positivo Tecnologia 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 Positivo Tecnologia 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 Positivo Tecnologia SA, you can compare the effects of market volatilities on Randon SA and Positivo Tecnologia 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 Positivo Tecnologia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Randon SA and Positivo Tecnologia.

Diversification Opportunities for Randon SA and Positivo Tecnologia

0.01

Correlation Coefficient

Randon SA  Positivo Tecnologia

Significant diversification

The 3 months correlation between Randon and Positivo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Randon SA Implementos and Positivo Tecnologia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Positivo Tecnologia 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 Positivo Tecnologia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Positivo Tecnologia has no effect on the direction of Randon SA i.e., Randon SA and Positivo Tecnologia go up and down completely randomly.

Pair Corralation between Randon SA and Positivo Tecnologia

Assuming the 90 days trading horizon Randon SA Implementos is expected to under-perform the Positivo Tecnologia. But the preferred stock apears to be less risky and, when comparing its historical volatility, Randon SA Implementos is 1.4 times less risky than Positivo Tecnologia. The preferred stock trades about -0.08 of its potential returns per unit of risk. The Positivo Tecnologia SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  522.00  in Positivo Tecnologia SA on November 29, 2024 and sell it today you would lose (2.00) from holding Positivo Tecnologia SA or give up 0.38% of portfolio value over 90 days.

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

Randon SA Implementos  vs.  Positivo Tecnologia SA

Randon SA Implementos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Randon SA Implementos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Preferred 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.

Positivo Tecnologia

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Positivo Tecnologia SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Positivo Tecnologia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Randon SA and Positivo Tecnologia

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

The idea behind Randon SA Implementos and Positivo Tecnologia 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.