Correlation Between Imobiliria Construtora and Galp Energia

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Can any of the company-specific risk be diversified away by investing in both Imobiliria Construtora and Galp Energia 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 Imobiliria Construtora and Galp Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imobiliria Construtora Gro and Galp Energia SGPS, you can compare the effects of market volatilities on Imobiliria Construtora and Galp Energia 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 Imobiliria Construtora with a short position of Galp Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imobiliria Construtora and Galp Energia.

Diversification Opportunities for Imobiliria Construtora and Galp Energia

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Imobiliria Construtora and Galp Energia

If you would invest  1,075  in Galp Energia SGPS on December 30, 2023 and sell it today you would earn a total of  457.00  from holding Galp Energia SGPS or generate 42.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Imobiliria Construtora Gro  vs.  Galp Energia SGPS

 Performance 
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Imobiliria Construtora 

Risk-Adjusted Performance

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Over the last 90 days Imobiliria Construtora Gro has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Imobiliria Construtora is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Galp Energia SGPS 

Risk-Adjusted Performance

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OK
Compared to the overall equity markets, risk-adjusted returns on investments in Galp Energia SGPS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Galp Energia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Imobiliria Construtora and Galp Energia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Imobiliria Construtora and Galp Energia

The main advantage of trading using opposite Imobiliria Construtora and Galp Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imobiliria Construtora position performs unexpectedly, Galp Energia 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 Galp Energia will offset losses from the drop in Galp Energia's long position.
The idea behind Imobiliria Construtora Gro and Galp Energia SGPS 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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