Correlation Between Cosan SA and Ultrapar Participacoes
Can any of the company-specific risk be diversified away by investing in both Cosan SA and Ultrapar Participacoes 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 Cosan SA and Ultrapar Participacoes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan SA ADR and Ultrapar Participacoes SA, you can compare the effects of market volatilities on Cosan SA and Ultrapar Participacoes 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 Cosan SA with a short position of Ultrapar Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan SA and Ultrapar Participacoes.
Diversification Opportunities for Cosan SA and Ultrapar Participacoes
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cosan and Ultrapar is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA ADR and Ultrapar Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapar Participacoes and Cosan SA 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 Cosan SA ADR are associated (or correlated) with Ultrapar Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapar Participacoes has no effect on the direction of Cosan SA i.e., Cosan SA and Ultrapar Participacoes go up and down completely randomly.
Pair Corralation between Cosan SA and Ultrapar Participacoes
Given the investment horizon of 90 days Cosan SA ADR is expected to under-perform the Ultrapar Participacoes. In addition to that, Cosan SA is 1.2 times more volatile than Ultrapar Participacoes SA. It trades about -0.16 of its total potential returns per unit of risk. Ultrapar Participacoes SA is currently generating about 0.16 per unit of volatility. If you would invest 285.00 in Ultrapar Participacoes SA on June 4, 2025 and sell it today you would earn a total of 74.00 from holding Ultrapar Participacoes SA or generate 25.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosan SA ADR vs. Ultrapar Participacoes SA
Performance |
| Timeline |
| Cosan SA ADR |
| Ultrapar Participacoes |
Cosan SA and Ultrapar Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan SA and Ultrapar Participacoes
The main advantage of trading using opposite Cosan SA and Ultrapar Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA position performs unexpectedly, Ultrapar Participacoes 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 Ultrapar Participacoes will offset losses from the drop in Ultrapar Participacoes' long position.| Cosan SA vs. Delek Energy | Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Par Pacific Holdings | Cosan SA vs. Valvoline |
| Ultrapar Participacoes vs. Cosan SA ADR | Ultrapar Participacoes vs. Neste Oyj | Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Valvoline |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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