Correlation Between Grazziotin and Sendas Distribuidora

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

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

Diversification Opportunities for Grazziotin and Sendas Distribuidora

0.59

Correlation Coefficient

Grazziotin  Sendas Distribuidora

Very weak diversification

The 3 months correlation between Grazziotin and Sendas is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Grazziotin SA and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora and Grazziotin 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 Grazziotin SA are associated (or correlated) with Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Grazziotin i.e., Grazziotin and Sendas Distribuidora go up and down completely randomly.

Pair Corralation between Grazziotin and Sendas Distribuidora

Assuming the 90 days trading horizon Grazziotin SA is expected to generate 0.91 times more return on investment than Sendas Distribuidora. However, Grazziotin SA is 1.1 times less risky than Sendas Distribuidora. It trades about 0.07 of its potential returns per unit of risk. Sendas Distribuidora SA is currently generating about 0.05 per unit of risk. If you would invest  2,483  in Grazziotin SA on April 24, 2025 and sell it today you would earn a total of  221.00  from holding Grazziotin SA or generate 8.9% return on investment over 90 days.

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

Grazziotin SA  vs.  Sendas Distribuidora SA

Grazziotin SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grazziotin SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Grazziotin may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sendas Distribuidora

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sendas Distribuidora SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Sendas Distribuidora may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Grazziotin and Sendas Distribuidora

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

The idea behind Grazziotin SA and Sendas Distribuidora 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.