Correlation Between Vasta Platform and CleanGo Innovations

Can any of the company-specific risk be diversified away by investing in both Vasta Platform and CleanGo Innovations 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 Vasta Platform and CleanGo Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vasta Platform and CleanGo Innovations, you can compare the effects of market volatilities on Vasta Platform and CleanGo Innovations 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 Vasta Platform with a short position of CleanGo Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vasta Platform and CleanGo Innovations.

Diversification Opportunities for Vasta Platform and CleanGo Innovations

-0.7

Correlation Coefficient

Vasta Platform  CleanGo Innovations

Excellent diversification

The 3 months correlation between Vasta and CleanGo is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and CleanGo Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanGo Innovations and Vasta Platform 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 Vasta Platform are associated (or correlated) with CleanGo Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanGo Innovations has no effect on the direction of Vasta Platform i.e., Vasta Platform and CleanGo Innovations go up and down completely randomly.

Pair Corralation between Vasta Platform and CleanGo Innovations

Given the investment horizon of 90 days Vasta Platform is expected to generate 1.18 times more return on investment than CleanGo Innovations. However, Vasta Platform is 1.18 times more volatile than CleanGo Innovations. It trades about 0.07 of its potential returns per unit of risk. CleanGo Innovations is currently generating about -0.22 per unit of risk. If you would invest  218.00  in Vasta Platform on October 12, 2024 and sell it today you would earn a total of  12.00  from holding Vasta Platform or generate 5.5% return on investment over 90 days.

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

Vasta Platform  vs.  CleanGo Innovations

Vasta Platform

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vasta Platform has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CleanGo Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CleanGo Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Vasta Platform and CleanGo Innovations

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

The idea behind Vasta Platform and CleanGo Innovations 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.