Correlation Between Vasta Platform and Exceed World

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

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

Diversification Opportunities for Vasta Platform and Exceed World

-0.57

Correlation Coefficient

Vasta Platform  Exceed World

Excellent diversification

The 3 months correlation between Vasta and Exceed is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and Exceed World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exceed World 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 Exceed World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exceed World has no effect on the direction of Vasta Platform i.e., Vasta Platform and Exceed World go up and down completely randomly.

Pair Corralation between Vasta Platform and Exceed World

Given the investment horizon of 90 days Vasta Platform is expected to under-perform the Exceed World. But the stock apears to be less risky and, when comparing its historical volatility, Vasta Platform is 9.98 times less risky than Exceed World. The stock trades about -0.04 of its potential returns per unit of risk. The Exceed World is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  82.00  in Exceed World on September 19, 2024 and sell it today you would lose (32.00) from holding Exceed World or give up 39.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Vasta Platform  vs.  Exceed World

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 uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Exceed World

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exceed World are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, Exceed World showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vasta Platform and Exceed World

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

The idea behind Vasta Platform and Exceed World 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.