Correlation Between Ultrapar Participacoes and CHELLARAMS PLC

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Can any of the company-specific risk be diversified away by investing in both Ultrapar Participacoes and CHELLARAMS PLC 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 Ultrapar Participacoes and CHELLARAMS PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultrapar Participacoes SA and CHELLARAMS PLC, you can compare the effects of market volatilities on Ultrapar Participacoes and CHELLARAMS PLC 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 Ultrapar Participacoes with a short position of CHELLARAMS PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultrapar Participacoes and CHELLARAMS PLC.

Diversification Opportunities for Ultrapar Participacoes and CHELLARAMS PLC

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Ultrapar and CHELLARAMS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ultrapar Participacoes SA and CHELLARAMS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHELLARAMS PLC and Ultrapar Participacoes 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 Ultrapar Participacoes SA are associated (or correlated) with CHELLARAMS PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHELLARAMS PLC has no effect on the direction of Ultrapar Participacoes i.e., Ultrapar Participacoes and CHELLARAMS PLC go up and down completely randomly.

Pair Corralation between Ultrapar Participacoes and CHELLARAMS PLC

Considering the 90-day investment horizon Ultrapar Participacoes SA is expected to generate 2.74 times more return on investment than CHELLARAMS PLC. However, Ultrapar Participacoes is 2.74 times more volatile than CHELLARAMS PLC. It trades about 0.16 of its potential returns per unit of risk. CHELLARAMS PLC is currently generating about 0.18 per unit of risk. 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 Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Ultrapar Participacoes SA  vs.  CHELLARAMS PLC

 Performance 
       Timeline  
Ultrapar Participacoes 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ultrapar Participacoes SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Ultrapar Participacoes reported solid returns over the last few months and may actually be approaching a breakup point.
CHELLARAMS PLC 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CHELLARAMS PLC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, CHELLARAMS PLC may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Ultrapar Participacoes and CHELLARAMS PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ultrapar Participacoes and CHELLARAMS PLC

The main advantage of trading using opposite Ultrapar Participacoes and CHELLARAMS PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultrapar Participacoes position performs unexpectedly, CHELLARAMS PLC 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 CHELLARAMS PLC will offset losses from the drop in CHELLARAMS PLC's long position.
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The idea behind Ultrapar Participacoes SA and CHELLARAMS PLC 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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