Correlation Between Vitru and Vasta Platform

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

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

Diversification Opportunities for Vitru and Vasta Platform

-0.19

Correlation Coefficient

Vitru  Vasta Platform

Good diversification

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

Pair Corralation between Vitru and Vasta Platform

Given the investment horizon of 90 days Vitru is expected to under-perform the Vasta Platform. In addition to that, Vitru is 1.15 times more volatile than Vasta Platform. It trades about -0.05 of its total potential returns per unit of risk. Vasta Platform is currently generating about -0.02 per unit of volatility. If you would invest  393.00  in Vasta Platform on September 3, 2024 and sell it today you would lose (153.00) from holding Vasta Platform or give up 38.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	30.91%
Values	Daily Returns

Vitru  vs.  Vasta Platform

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.

Vasta Platform

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vasta Platform are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Vasta Platform may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vitru and Vasta Platform

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

The idea behind Vitru and Vasta Platform 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.