Correlation Between Sendas Distribuidora and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Sendas Distribuidora and NYSE Composite 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 Sendas Distribuidora and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sendas Distribuidora SA and NYSE Composite, you can compare the effects of market volatilities on Sendas Distribuidora and NYSE Composite 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 Sendas Distribuidora with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sendas Distribuidora and NYSE Composite.
Diversification Opportunities for Sendas Distribuidora and NYSE Composite
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sendas and NYSE is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sendas Distribuidora SA and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Sendas Distribuidora 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 Sendas Distribuidora SA are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Sendas Distribuidora i.e., Sendas Distribuidora and NYSE Composite go up and down completely randomly.
Pair Corralation between Sendas Distribuidora and NYSE Composite
Given the investment horizon of 90 days Sendas Distribuidora SA is expected to under-perform the NYSE Composite. In addition to that, Sendas Distribuidora is 2.46 times more volatile than NYSE Composite. It trades about -0.41 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.12 per unit of volatility. If you would invest 1,779,789 in NYSE Composite on March 4, 2024 and sell it today you would earn a total of 28,580 from holding NYSE Composite or generate 1.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sendas Distribuidora SA vs. NYSE Composite
Performance |
Timeline |
Sendas Distribuidora and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Sendas Distribuidora SA
Pair trading matchups for Sendas Distribuidora
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Sendas Distribuidora and NYSE Composite
The main advantage of trading using opposite Sendas Distribuidora and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sendas Distribuidora position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
NYSE Composite vs. Virco Manufacturing | NYSE Composite vs. Coupang LLC | NYSE Composite vs. Summit Hotel Properties | NYSE Composite vs. BBB Foods |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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