Correlation Between Vitru and Cogna Educacao

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

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

Diversification Opportunities for Vitru and Cogna Educacao

0.0

Correlation Coefficient

Vitru  Cogna Educacao

Pay attention - limited upside

The 3 months correlation between Vitru and Cogna is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vitru and Cogna Educacao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogna Educacao SA and Vitru 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 Vitru are associated (or correlated) with Cogna Educacao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogna Educacao SA has no effect on the direction of Vitru i.e., Vitru and Cogna Educacao go up and down completely randomly.

Pair Corralation between Vitru and Cogna Educacao

If you would invest  19.00  in Cogna Educacao SA on December 28, 2024 and sell it today you would earn a total of  10.00  from holding Cogna Educacao SA or generate 52.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vitru  vs.  Cogna Educacao SA

Vitru

Risk-Adjusted Performance

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.

Cogna Educacao SA

Risk-Adjusted Performance

OK

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

Pair Trading with Vitru and Cogna Educacao

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

The idea behind Vitru and Cogna Educacao SA 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.