Correlation Between MARKET VECTR and Gol Intelligent

Can any of the company-specific risk be diversified away by investing in both MARKET VECTR and Gol Intelligent 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 MARKET VECTR and Gol Intelligent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MARKET VECTR RETAIL and Gol Intelligent Airlines, you can compare the effects of market volatilities on MARKET VECTR and Gol Intelligent 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 MARKET VECTR with a short position of Gol Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARKET VECTR and Gol Intelligent.

Diversification Opportunities for MARKET VECTR and Gol Intelligent

0.0

Correlation Coefficient

MARKET VECTR  Gol Intelligent

Pay attention - limited upside

The 3 months correlation between MARKET and Gol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL and Gol Intelligent Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gol Intelligent Airlines and MARKET VECTR 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 MARKET VECTR RETAIL are associated (or correlated) with Gol Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gol Intelligent Airlines has no effect on the direction of MARKET VECTR i.e., MARKET VECTR and Gol Intelligent go up and down completely randomly.

Pair Corralation between MARKET VECTR and Gol Intelligent

If you would invest  20,080  in MARKET VECTR RETAIL on October 24, 2024 and sell it today you would earn a total of  2,280  from holding MARKET VECTR RETAIL or generate 11.35% return on investment over 90 days.

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

MARKET VECTR RETAIL  vs.  Gol Intelligent Airlines

MARKET VECTR RETAIL

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MARKET VECTR RETAIL are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, MARKET VECTR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gol Intelligent Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with MARKET VECTR and Gol Intelligent

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

The idea behind MARKET VECTR RETAIL and Gol Intelligent Airlines 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.