Correlation Between Recrusul and Manufatura
Can any of the company-specific risk be diversified away by investing in both Recrusul and Manufatura 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 Recrusul and Manufatura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Recrusul SA and Manufatura de Brinquedos, you can compare the effects of market volatilities on Recrusul and Manufatura 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 Recrusul with a short position of Manufatura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recrusul and Manufatura.
Diversification Opportunities for Recrusul and Manufatura
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Recrusul and Manufatura is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Recrusul SA and Manufatura de Brinquedos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manufatura de Brinquedos and Recrusul 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 Recrusul SA are associated (or correlated) with Manufatura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manufatura de Brinquedos has no effect on the direction of Recrusul i.e., Recrusul and Manufatura go up and down completely randomly.
Pair Corralation between Recrusul and Manufatura
Assuming the 90 days trading horizon Recrusul is expected to generate 7.66 times less return on investment than Manufatura. But when comparing it to its historical volatility, Recrusul SA is 3.01 times less risky than Manufatura. It trades about 0.02 of its potential returns per unit of risk. Manufatura de Brinquedos is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Manufatura de Brinquedos on September 23, 2024 and sell it today you would lose (44.00) from holding Manufatura de Brinquedos or give up 11.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Recrusul SA vs. Manufatura de Brinquedos
Performance |
Timeline |
Recrusul SA |
Manufatura de Brinquedos |
Recrusul and Manufatura Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Recrusul and Manufatura
The main advantage of trading using opposite Recrusul and Manufatura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Recrusul position performs unexpectedly, Manufatura 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 Manufatura will offset losses from the drop in Manufatura's long position.Recrusul vs. METISA Metalrgica Timboense | Recrusul vs. Wetzel SA | Recrusul vs. Randon SA Implementos | Recrusul vs. Electro Ao Altona |
Manufatura vs. Companhia de Gs | Manufatura vs. Springs Global Participaes | Manufatura vs. Companhia de Tecidos | Manufatura vs. Marcopolo SA |
Check out your portfolio center.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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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