Correlation Between Westwing Comrcio and Intelbras

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

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

Diversification Opportunities for Westwing Comrcio and Intelbras

0.69

Correlation Coefficient

Westwing Comrcio  Intelbras

Poor diversification

The 3 months correlation between Westwing and Intelbras is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Westwing Comrcio Varejista and Intelbras SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelbras SA and Westwing Comrcio 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 Westwing Comrcio Varejista are associated (or correlated) with Intelbras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelbras SA has no effect on the direction of Westwing Comrcio i.e., Westwing Comrcio and Intelbras go up and down completely randomly.

Pair Corralation between Westwing Comrcio and Intelbras

Assuming the 90 days trading horizon Westwing Comrcio Varejista is expected to generate 41.96 times more return on investment than Intelbras. However, Westwing Comrcio is 41.96 times more volatile than Intelbras SA . It trades about 0.1 of its potential returns per unit of risk. Intelbras SA is currently generating about -0.05 per unit of risk. If you would invest  960.00  in Westwing Comrcio Varejista on October 23, 2024 and sell it today you would lose (493.00) from holding Westwing Comrcio Varejista or give up 51.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Westwing Comrcio Varejista  vs.  Intelbras SA

Westwing Comrcio Var

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westwing Comrcio Varejista has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Intelbras SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelbras SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Westwing Comrcio and Intelbras

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

The idea behind Westwing Comrcio Varejista and Intelbras 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.