Correlation Between Tupy SA and Omega Gerao

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

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

Diversification Opportunities for Tupy SA and Omega Gerao

0.0

Correlation Coefficient

Tupy SA  Omega Gerao

Pay attention - limited upside

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

Pair Corralation between Tupy SA and Omega Gerao

If you would invest (100.00) in Omega Gerao SA on February 22, 2024 and sell it today you would earn a total of  100.00  from holding Omega Gerao SA or generate -100.0% return on investment over 90 days.

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

Tupy SA  vs.  Omega Gerao SA

Tupy SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tupy SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Tupy SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Omega Gerao SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omega Gerao SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Omega Gerao is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tupy SA and Omega Gerao

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

The idea behind Tupy SA and Omega Gerao SA 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.