Correlation Between Caixa Seguridade and Itasa Investimentos

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

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

Diversification Opportunities for Caixa Seguridade and Itasa Investimentos

0.14

Correlation Coefficient

Caixa Seguridade  Itasa Investimentos

Average diversification

The 3 months correlation between Caixa and Itasa is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Caixa Seguridade Participaes and Itasa Investimentos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itasa Investimentos and Caixa 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 Caixa Seguridade Participaes are associated (or correlated) with Itasa Investimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itasa Investimentos has no effect on the direction of Caixa Seguridade i.e., Caixa Seguridade and Itasa Investimentos go up and down completely randomly.

Pair Corralation between Caixa Seguridade and Itasa Investimentos

Assuming the 90 days trading horizon Caixa Seguridade Participaes is expected to under-perform the Itasa Investimentos. But the stock apears to be less risky and, when comparing its historical volatility, Caixa Seguridade Participaes is 1.11 times less risky than Itasa Investimentos. The stock trades about -0.13 of its potential returns per unit of risk. The Itasa Investimentos is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,089  in Itasa Investimentos on April 25, 2025 and sell it today you would lose (35.00) from holding Itasa Investimentos or give up 3.21% of portfolio value over 90 days.

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

Caixa Seguridade Participaes  vs.  Itasa Investimentos

Caixa Seguridade Par

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caixa Seguridade Participaes 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.

Itasa Investimentos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Itasa Investimentos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Itasa Investimentos is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Caixa Seguridade and Itasa Investimentos

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

The idea behind Caixa Seguridade Participaes and Itasa Investimentos 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..