Correlation Between Zenvia and Regional Health

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

By analyzing existing cross correlation between Zenvia Inc and Regional Health Properties, you can compare the effects of market volatilities on Zenvia and Regional Health 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 Zenvia with a short position of Regional Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zenvia and Regional Health.

Diversification Opportunities for Zenvia and Regional Health

0.67

Correlation Coefficient

Zenvia  Regional Health

Poor diversification

The 3 months correlation between Zenvia and Regional is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zenvia Inc and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop and Zenvia 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 Zenvia Inc are associated (or correlated) with Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of Zenvia i.e., Zenvia and Regional Health go up and down completely randomly.

Pair Corralation between Zenvia and Regional Health

Given the investment horizon of 90 days Zenvia is expected to generate 1.41 times less return on investment than Regional Health. In addition to that, Zenvia is 1.31 times more volatile than Regional Health Properties. It trades about 0.03 of its total potential returns per unit of risk. Regional Health Properties is currently generating about 0.05 per unit of volatility. If you would invest  400.00  in Regional Health Properties on September 27, 2024 and sell it today you would earn a total of  100.00  from holding Regional Health Properties or generate 25.0% return on investment over 90 days.

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

Zenvia Inc  vs.  Regional Health Properties

Zenvia Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zenvia Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Zenvia showed solid returns over the last few months and may actually be approaching a breakup point.

Regional Health Prop

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regional Health Properties are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Regional Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zenvia and Regional Health

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

The idea behind Zenvia Inc and Regional Health Properties 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.