Correlation Between TIM Participacoes and Graham Holdings

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

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

Diversification Opportunities for TIM Participacoes and Graham Holdings

-0.11

Correlation Coefficient

TIM Participacoes  Graham Holdings

Good diversification

The 3 months correlation between TIM and Graham is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding TIM Participacoes SA and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings and TIM 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 TIM Participacoes SA are associated (or correlated) with Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of TIM Participacoes i.e., TIM Participacoes and Graham Holdings go up and down completely randomly.

Pair Corralation between TIM Participacoes and Graham Holdings

Given the investment horizon of 90 days TIM Participacoes SA is expected to generate 1.42 times more return on investment than Graham Holdings. However, TIM Participacoes is 1.42 times more volatile than Graham Holdings Co. It trades about 0.09 of its potential returns per unit of risk. Graham Holdings Co is currently generating about 0.02 per unit of risk. If you would invest  1,647  in TIM Participacoes SA on May 2, 2025 and sell it today you would earn a total of  154.00  from holding TIM Participacoes SA or generate 9.35% return on investment over 90 days.

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

TIM Participacoes SA  vs.  Graham Holdings Co

TIM Participacoes

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TIM Participacoes SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, TIM Participacoes may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Graham Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Graham Holdings Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Graham Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with TIM Participacoes and Graham Holdings

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

The idea behind TIM Participacoes SA and Graham Holdings Co 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.