Correlation Between Porto Seguro and BB Seguridade

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

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

Diversification Opportunities for Porto Seguro and BB Seguridade

0.0

Correlation Coefficient

Porto Seguro  BB Seguridade

Pay attention - limited upside

The 3 months correlation between Porto and BBSEY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Porto Seguro SA and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic and Porto Seguro 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 Porto Seguro SA are associated (or correlated) with BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of Porto Seguro i.e., Porto Seguro and BB Seguridade go up and down completely randomly.

Pair Corralation between Porto Seguro and BB Seguridade

Assuming the 90 days trading horizon Porto Seguro SA is expected to generate 0.94 times more return on investment than BB Seguridade. However, Porto Seguro SA is 1.06 times less risky than BB Seguridade. It trades about 0.09 of its potential returns per unit of risk. BB Seguridade Participacoes is currently generating about 0.02 per unit of risk. If you would invest  4,882  in Porto Seguro SA on May 18, 2025 and sell it today you would earn a total of  354.00  from holding Porto Seguro SA or generate 7.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Porto Seguro SA  vs.  BB Seguridade Participacoes

Porto Seguro SA

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Porto Seguro SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Porto Seguro may actually be approaching a critical reversion point that can send shares even higher in September 2025.

BB Seguridade Partic

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in BB Seguridade Participacoes are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, BB Seguridade is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Porto Seguro and BB Seguridade

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

The idea behind Porto Seguro SA and BB Seguridade Participacoes 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.