Correlation Between Vasta Platform and JIADE LIMITED

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

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

Diversification Opportunities for Vasta Platform and JIADE LIMITED

-0.52

Correlation Coefficient

Vasta Platform  JIADE LIMITED

Excellent diversification

The 3 months correlation between Vasta and JIADE is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and JIADE LIMITED Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIADE LIMITED Common 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 JIADE LIMITED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIADE LIMITED Common has no effect on the direction of Vasta Platform i.e., Vasta Platform and JIADE LIMITED go up and down completely randomly.

Pair Corralation between Vasta Platform and JIADE LIMITED

Given the investment horizon of 90 days Vasta Platform is expected to generate 0.42 times more return on investment than JIADE LIMITED. However, Vasta Platform is 2.41 times less risky than JIADE LIMITED. It trades about 0.25 of its potential returns per unit of risk. JIADE LIMITED Common is currently generating about 0.01 per unit of risk. If you would invest  240.00  in Vasta Platform on December 27, 2024 and sell it today you would earn a total of  163.00  from holding Vasta Platform or generate 67.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Vasta Platform  vs.  JIADE LIMITED Common

Vasta Platform

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vasta Platform are ranked lower than 19 (%) 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.

JIADE LIMITED Common

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JIADE LIMITED Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, JIADE LIMITED may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Vasta Platform and JIADE LIMITED

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

The idea behind Vasta Platform and JIADE LIMITED Common 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.