Correlation Between Vibra Energia and Caixa Seguridade

Can any of the company-specific risk be diversified away by investing in both Vibra Energia and Caixa Seguridade 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 Vibra Energia and Caixa Seguridade into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Vibra Energia and Caixa Seguridade

-0.14

Correlation Coefficient

Vibra Energia  Caixa Seguridade

Good diversification

The 3 months correlation between Vibra and Caixa is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vibra Energia SA and Caixa Seguridade Participaes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixa Seguridade Par and Vibra Energia 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 Vibra Energia SA are associated (or correlated) with Caixa Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixa Seguridade Par has no effect on the direction of Vibra Energia i.e., Vibra Energia and Caixa Seguridade go up and down completely randomly.

Pair Corralation between Vibra Energia and Caixa Seguridade

Assuming the 90 days trading horizon Vibra Energia is expected to generate 1.76 times less return on investment than Caixa Seguridade. In addition to that, Vibra Energia is 1.55 times more volatile than Caixa Seguridade Participaes. It trades about 0.04 of its total potential returns per unit of risk. Caixa Seguridade Participaes is currently generating about 0.1 per unit of volatility. If you would invest  1,394  in Caixa Seguridade Participaes on December 30, 2024 and sell it today you would earn a total of  126.00  from holding Caixa Seguridade Participaes or generate 9.04% return on investment over 90 days.

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

Vibra Energia SA  vs.  Caixa Seguridade Participaes

Vibra Energia SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vibra Energia SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Vibra Energia is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Caixa Seguridade Par

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caixa Seguridade Participaes are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Caixa Seguridade may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Vibra Energia and Caixa Seguridade

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

The idea behind Vibra Energia SA and Caixa Seguridade Participaes 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.