Correlation Between Unipar Carbocloro and Dexxos Participaes

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

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

Diversification Opportunities for Unipar Carbocloro and Dexxos Participaes

-0.68

Correlation Coefficient

Unipar Carbocloro  Dexxos Participaes

Excellent diversification

The 3 months correlation between Unipar and Dexxos is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Unipar Carbocloro SA and Dexxos Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexxos Participaes and Unipar Carbocloro 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 Unipar Carbocloro SA are associated (or correlated) with Dexxos Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexxos Participaes has no effect on the direction of Unipar Carbocloro i.e., Unipar Carbocloro and Dexxos Participaes go up and down completely randomly.

Pair Corralation between Unipar Carbocloro and Dexxos Participaes

Assuming the 90 days trading horizon Unipar Carbocloro SA is expected to generate 1.82 times more return on investment than Dexxos Participaes. However, Unipar Carbocloro is 1.82 times more volatile than Dexxos Participaes SA. It trades about 0.07 of its potential returns per unit of risk. Dexxos Participaes SA is currently generating about -0.06 per unit of risk. If you would invest  4,539  in Unipar Carbocloro SA on September 12, 2024 and sell it today you would earn a total of  595.00  from holding Unipar Carbocloro SA or generate 13.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Unipar Carbocloro SA  vs.  Dexxos Participaes SA

Unipar Carbocloro

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unipar Carbocloro SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Unipar Carbocloro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dexxos Participaes

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Unipar Carbocloro and Dexxos Participaes

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

The idea behind Unipar Carbocloro SA and Dexxos Participaes 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 Commodity Directory module to find actively traded commodities issued by global exchanges.