Correlation Between Schulz SA and EZTEC Empreendimentos

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

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

Diversification Opportunities for Schulz SA and EZTEC Empreendimentos

0.09

Correlation Coefficient

Schulz SA  EZTEC Empreendimentos

Significant diversification

The 3 months correlation between Schulz and EZTEC is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Schulz SA and EZTEC Empreendimentos e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZTEC Empreendimentos and Schulz 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 Schulz SA are associated (or correlated) with EZTEC Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZTEC Empreendimentos has no effect on the direction of Schulz SA i.e., Schulz SA and EZTEC Empreendimentos go up and down completely randomly.

Pair Corralation between Schulz SA and EZTEC Empreendimentos

Assuming the 90 days trading horizon Schulz SA is expected to under-perform the EZTEC Empreendimentos. But the preferred stock apears to be less risky and, when comparing its historical volatility, Schulz SA is 2.27 times less risky than EZTEC Empreendimentos. The preferred stock trades about -0.02 of its potential returns per unit of risk. The EZTEC Empreendimentos e is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,069  in EZTEC Empreendimentos e on December 31, 2024 and sell it today you would earn a total of  471.00  from holding EZTEC Empreendimentos e or generate 44.06% return on investment over 90 days.

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

Schulz SA  vs.  EZTEC Empreendimentos e

Schulz SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schulz SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Schulz SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

EZTEC Empreendimentos

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EZTEC Empreendimentos e are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EZTEC Empreendimentos unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Schulz SA and EZTEC Empreendimentos

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

The idea behind Schulz SA and EZTEC Empreendimentos e 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.