Correlation Between Cruzeiro and Ser Educacional

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

By analyzing existing cross correlation between Cruzeiro do Sul and Ser Educacional Sa, you can compare the effects of market volatilities on Cruzeiro and Ser Educacional 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 Cruzeiro with a short position of Ser Educacional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cruzeiro and Ser Educacional.

Diversification Opportunities for Cruzeiro and Ser Educacional

0.98

Correlation Coefficient

Cruzeiro  Ser Educacional

Almost no diversification

The 3 months correlation between Cruzeiro and Ser is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Cruzeiro do Sul and Ser Educacional Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ser Educacional Sa and Cruzeiro 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 Cruzeiro do Sul are associated (or correlated) with Ser Educacional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ser Educacional Sa has no effect on the direction of Cruzeiro i.e., Cruzeiro and Ser Educacional go up and down completely randomly.

Pair Corralation between Cruzeiro and Ser Educacional

Assuming the 90 days trading horizon Cruzeiro is expected to generate 1.8 times less return on investment than Ser Educacional. But when comparing it to its historical volatility, Cruzeiro do Sul is 1.79 times less risky than Ser Educacional. It trades about 0.2 of its potential returns per unit of risk. Ser Educacional Sa is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  516.00  in Ser Educacional Sa on April 20, 2025 and sell it today you would earn a total of  324.00  from holding Ser Educacional Sa or generate 62.79% return on investment over 90 days.

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

Cruzeiro do Sul  vs.  Ser Educacional Sa

Cruzeiro do Sul

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cruzeiro do Sul are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cruzeiro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ser Educacional Sa

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ser Educacional Sa are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ser Educacional unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cruzeiro and Ser Educacional

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

The idea behind Cruzeiro do Sul and Ser Educacional 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.