Correlation Between Recrusul and Inepar SA

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

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

Diversification Opportunities for Recrusul and Inepar SA

0.03

Correlation Coefficient

Recrusul  Inepar SA

Significant diversification

The 3 months correlation between Recrusul and Inepar is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Recrusul SA and Inepar SA Indstria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inepar SA Indstria and Recrusul 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 Recrusul SA are associated (or correlated) with Inepar SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inepar SA Indstria has no effect on the direction of Recrusul i.e., Recrusul and Inepar SA go up and down completely randomly.

Pair Corralation between Recrusul and Inepar SA

Assuming the 90 days trading horizon Recrusul SA is expected to under-perform the Inepar SA. In addition to that, Recrusul is 1.33 times more volatile than Inepar SA Indstria. It trades about -0.36 of its total potential returns per unit of risk. Inepar SA Indstria is currently generating about 0.06 per unit of volatility. If you would invest  289.00  in Inepar SA Indstria on February 2, 2024 and sell it today you would earn a total of  9.00  from holding Inepar SA Indstria or generate 3.11% return on investment over 90 days.

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

Recrusul SA  vs.  Inepar SA Indstria

Recrusul SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Recrusul 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 Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Inepar SA Indstria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inepar SA Indstria has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Preferred Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Recrusul and Inepar SA

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

The idea behind Recrusul SA and Inepar SA Indstria 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.