Correlation Between Sendas Distribuidora and Caixa Seguridade

Can any of the company-specific risk be diversified away by investing in both Sendas Distribuidora and Caixa Seguridade 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 Caixa Seguridade 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 Caixa Seguridade Participaes, you can compare the effects of market volatilities on Sendas Distribuidora and Caixa Seguridade 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 Caixa Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sendas Distribuidora and Caixa Seguridade.

Diversification Opportunities for Sendas Distribuidora and Caixa Seguridade

-0.58

Correlation Coefficient

Sendas Distribuidora  Caixa Seguridade

Excellent diversification

The 3 months correlation between Sendas and Caixa is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sendas Distribuidora SA and Caixa Seguridade Participaes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixa Seguridade Par 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 Caixa Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixa Seguridade Par has no effect on the direction of Sendas Distribuidora i.e., Sendas Distribuidora and Caixa Seguridade go up and down completely randomly.

Pair Corralation between Sendas Distribuidora and Caixa Seguridade

Assuming the 90 days trading horizon Sendas Distribuidora SA is expected to generate 1.93 times more return on investment than Caixa Seguridade. However, Sendas Distribuidora is 1.93 times more volatile than Caixa Seguridade Participaes. It trades about 0.08 of its potential returns per unit of risk. Caixa Seguridade Participaes is currently generating about -0.14 per unit of risk. If you would invest  869.00  in Sendas Distribuidora SA on April 23, 2025 and sell it today you would earn a total of  104.00  from holding Sendas Distribuidora SA or generate 11.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Sendas Distribuidora SA  vs.  Caixa Seguridade Participaes

Sendas Distribuidora

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sendas Distribuidora SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Sendas Distribuidora unveiled solid returns over the last few months and may actually be approaching a breakup point.

Caixa Seguridade Par

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caixa Seguridade Participaes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Sendas Distribuidora and Caixa Seguridade

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

The idea behind Sendas Distribuidora SA and Caixa Seguridade Participaes 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.

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.