Correlation Between Vasta Platform and Vitru

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

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

Diversification Opportunities for Vasta Platform and Vitru

-0.19

Correlation Coefficient

Vasta Platform  Vitru

Good diversification

The 3 months correlation between Vasta and Vitru is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and Vitru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitru 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 Vitru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitru has no effect on the direction of Vasta Platform i.e., Vasta Platform and Vitru go up and down completely randomly.

Pair Corralation between Vasta Platform and Vitru

If you would invest  1,650  in Vitru on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Vitru or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Vasta Platform  vs.  Vitru

Vasta Platform

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vasta Platform are ranked lower than 7 (%) 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.

Vitru

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vasta Platform and Vitru

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

The idea behind Vasta Platform and Vitru 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.