Correlation Between CVC Brasil and Chubb

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

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

Diversification Opportunities for CVC Brasil and Chubb

-0.28

Correlation Coefficient

CVC Brasil  Chubb

Very good diversification

The 3 months correlation between CVC and Chubb is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CVC Brasil Operadora and Chubb Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chubb Limited and CVC Brasil 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 CVC Brasil Operadora are associated (or correlated) with Chubb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chubb Limited has no effect on the direction of CVC Brasil i.e., CVC Brasil and Chubb go up and down completely randomly.

Pair Corralation between CVC Brasil and Chubb

Assuming the 90 days trading horizon CVC Brasil Operadora is expected to generate 2.95 times more return on investment than Chubb. However, CVC Brasil is 2.95 times more volatile than Chubb Limited. It trades about 0.01 of its potential returns per unit of risk. Chubb Limited is currently generating about -0.08 per unit of risk. If you would invest  233.00  in CVC Brasil Operadora on April 23, 2025 and sell it today you would lose (2.00) from holding CVC Brasil Operadora or give up 0.86% of portfolio value over 90 days.

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

CVC Brasil Operadora  vs.  Chubb Limited

CVC Brasil Operadora

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CVC Brasil Operadora are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CVC Brasil is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Chubb Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chubb Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Chubb is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CVC Brasil and Chubb

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

The idea behind CVC Brasil Operadora and Chubb Limited 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.