Correlation Between SIMPAR SA and Moura Dubeux

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

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

Diversification Opportunities for SIMPAR SA and Moura Dubeux

0.91

Correlation Coefficient

SIMPAR SA  Moura Dubeux

Almost no diversification

The 3 months correlation between SIMPAR and Moura is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SIMPAR SA and Moura Dubeux Engenharia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moura Dubeux Engenharia and SIMPAR 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 SIMPAR SA are associated (or correlated) with Moura Dubeux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moura Dubeux Engenharia has no effect on the direction of SIMPAR SA i.e., SIMPAR SA and Moura Dubeux go up and down completely randomly.

Pair Corralation between SIMPAR SA and Moura Dubeux

Assuming the 90 days trading horizon SIMPAR SA is expected to under-perform the Moura Dubeux. In addition to that, SIMPAR SA is 1.16 times more volatile than Moura Dubeux Engenharia. It trades about -0.03 of its total potential returns per unit of risk. Moura Dubeux Engenharia is currently generating about 0.06 per unit of volatility. If you would invest  552.00  in Moura Dubeux Engenharia on October 11, 2024 and sell it today you would earn a total of  490.00  from holding Moura Dubeux Engenharia or generate 88.77% return on investment over 90 days.

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

SIMPAR SA  vs.  Moura Dubeux Engenharia

SIMPAR SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIMPAR SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Moura Dubeux Engenharia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moura Dubeux Engenharia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with SIMPAR SA and Moura Dubeux

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

The idea behind SIMPAR SA and Moura Dubeux Engenharia 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.