Correlation Between BB Seguridade and Fleury SA

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

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

Diversification Opportunities for BB Seguridade and Fleury SA

-0.35

Correlation Coefficient

BB Seguridade  Fleury SA

Very good diversification

The 3 months correlation between BBSE3 and Fleury is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BB Seguridade Participacoes and Fleury SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fleury SA and BB Seguridade 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 BB Seguridade Participacoes are associated (or correlated) with Fleury SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fleury SA has no effect on the direction of BB Seguridade i.e., BB Seguridade and Fleury SA go up and down completely randomly.

Pair Corralation between BB Seguridade and Fleury SA

Assuming the 90 days trading horizon BB Seguridade Participacoes is expected to under-perform the Fleury SA. But the stock apears to be less risky and, when comparing its historical volatility, BB Seguridade Participacoes is 1.69 times less risky than Fleury SA. The stock trades about -0.24 of its potential returns per unit of risk. The Fleury SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,299  in Fleury SA on April 24, 2025 and sell it today you would earn a total of  140.00  from holding Fleury SA or generate 10.78% return on investment over 90 days.

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

BB Seguridade Participacoes  vs.  Fleury SA

BB Seguridade Partic

Risk-Adjusted Performance

Very Weak

Over the last 90 days BB Seguridade Participacoes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fleury SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fleury SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fleury SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with BB Seguridade and Fleury SA

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

The idea behind BB Seguridade Participacoes and Fleury 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.