Correlation Between Baumer SA and Telefnica Brasil

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

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

Diversification Opportunities for Baumer SA and Telefnica Brasil

0.86

Correlation Coefficient

Baumer SA  Telefnica Brasil

Very poor diversification

The 3 months correlation between Baumer and Telefnica is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Baumer SA and Telefnica Brasil SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefnica Brasil and Baumer 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 Baumer SA are associated (or correlated) with Telefnica Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefnica Brasil has no effect on the direction of Baumer SA i.e., Baumer SA and Telefnica Brasil go up and down completely randomly.

Pair Corralation between Baumer SA and Telefnica Brasil

Assuming the 90 days trading horizon Baumer SA is expected to generate 3.06 times more return on investment than Telefnica Brasil. However, Baumer SA is 3.06 times more volatile than Telefnica Brasil SA. It trades about 0.12 of its potential returns per unit of risk. Telefnica Brasil SA is currently generating about 0.14 per unit of risk. If you would invest  1,645  in Baumer SA on April 24, 2025 and sell it today you would earn a total of  455.00  from holding Baumer SA or generate 27.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Baumer SA  vs.  Telefnica Brasil SA

Baumer SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baumer SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Baumer SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Telefnica Brasil

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telefnica Brasil SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Telefnica Brasil may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Baumer SA and Telefnica Brasil

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

The idea behind Baumer SA and Telefnica Brasil 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.