Correlation Between ReGen III and Cosan SA
Can any of the company-specific risk be diversified away by investing in both ReGen III and Cosan 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 ReGen III and Cosan SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReGen III Corp and Cosan SA ADR, you can compare the effects of market volatilities on ReGen III and Cosan 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 ReGen III with a short position of Cosan SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReGen III and Cosan SA.
Diversification Opportunities for ReGen III and Cosan SA
Poor diversification
The 3 months correlation between ReGen and Cosan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ReGen III Corp and Cosan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosan SA ADR and ReGen III 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 ReGen III Corp are associated (or correlated) with Cosan SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosan SA ADR has no effect on the direction of ReGen III i.e., ReGen III and Cosan SA go up and down completely randomly.
Pair Corralation between ReGen III and Cosan SA
If you would invest 1,092 in Cosan SA ADR on February 17, 2024 and sell it today you would earn a total of 31.00 from holding Cosan SA ADR or generate 2.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
ReGen III Corp vs. Cosan SA ADR
Performance |
Timeline |
ReGen III Corp |
Cosan SA ADR |
ReGen III and Cosan SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ReGen III and Cosan SA
The main advantage of trading using opposite ReGen III and Cosan SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReGen III position performs unexpectedly, Cosan 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 Cosan SA will offset losses from the drop in Cosan SA's long position.ReGen III vs. HF Sinclair Corp | ReGen III vs. PBF Energy | ReGen III vs. Delek Energy | ReGen III vs. CVR Energy |
Cosan SA vs. Delek Energy | Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Par Pacific Holdings | Cosan SA vs. Valvoline |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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