Correlation Between Companhia Brasileira and Aquafil SpA
Can any of the company-specific risk be diversified away by investing in both Companhia Brasileira and Aquafil SpA 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 Companhia Brasileira and Aquafil SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Brasileira De and Aquafil SpA, you can compare the effects of market volatilities on Companhia Brasileira and Aquafil SpA 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 Companhia Brasileira with a short position of Aquafil SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Brasileira and Aquafil SpA.
Diversification Opportunities for Companhia Brasileira and Aquafil SpA
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Companhia and Aquafil is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Brasileira De and Aquafil SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquafil SpA and Companhia Brasileira 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 Companhia Brasileira De are associated (or correlated) with Aquafil SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquafil SpA has no effect on the direction of Companhia Brasileira i.e., Companhia Brasileira and Aquafil SpA go up and down completely randomly.
Pair Corralation between Companhia Brasileira and Aquafil SpA
Assuming the 90 days horizon Companhia Brasileira De is expected to generate 1.63 times more return on investment than Aquafil SpA. However, Companhia Brasileira is 1.63 times more volatile than Aquafil SpA. It trades about 0.13 of its potential returns per unit of risk. Aquafil SpA is currently generating about 0.17 per unit of risk. If you would invest 48.00 in Companhia Brasileira De on August 20, 2025 and sell it today you would earn a total of 19.00 from holding Companhia Brasileira De or generate 39.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Companhia Brasileira De vs. Aquafil SpA
Performance |
| Timeline |
| Companhia Brasileira |
| Aquafil SpA |
Companhia Brasileira and Aquafil SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Brasileira and Aquafil SpA
The main advantage of trading using opposite Companhia Brasileira and Aquafil SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Brasileira position performs unexpectedly, Aquafil SpA 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 Aquafil SpA will offset losses from the drop in Aquafil SpA's long position.| Companhia Brasileira vs. ElringKlinger AG | Companhia Brasileira vs. AMA Group Limited | Companhia Brasileira vs. China MeiDong Auto | Companhia Brasileira vs. ElringKlinger AG |
| Aquafil SpA vs. Clarke Inc | Aquafil SpA vs. Ainsworth Game Technology | Aquafil SpA vs. Tsutsumi Jewelry CoLtd | Aquafil SpA vs. OXE Marine AB |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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