Correlation Between Vasta Platform and CopAur Minerals

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

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

Diversification Opportunities for Vasta Platform and CopAur Minerals

0.72

Correlation Coefficient

Vasta Platform  CopAur Minerals

Poor diversification

The 3 months correlation between Vasta and CopAur is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and CopAur Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CopAur Minerals 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 CopAur Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CopAur Minerals has no effect on the direction of Vasta Platform i.e., Vasta Platform and CopAur Minerals go up and down completely randomly.

Pair Corralation between Vasta Platform and CopAur Minerals

Given the investment horizon of 90 days Vasta Platform is expected to generate 0.44 times more return on investment than CopAur Minerals. However, Vasta Platform is 2.27 times less risky than CopAur Minerals. It trades about 0.26 of its potential returns per unit of risk. CopAur Minerals is currently generating about 0.07 per unit of risk. If you would invest  214.00  in Vasta Platform on December 19, 2024 and sell it today you would earn a total of  141.00  from holding Vasta Platform or generate 65.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.72%
Values	Daily Returns

Vasta Platform  vs.  CopAur Minerals

Vasta Platform

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vasta Platform are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vasta Platform sustained solid returns over the last few months and may actually be approaching a breakup point.

CopAur Minerals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CopAur Minerals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, CopAur Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vasta Platform and CopAur Minerals

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

The idea behind Vasta Platform and CopAur Minerals 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.