Correlation Between Direcional Engenharia and Dimed SA

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

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

Diversification Opportunities for Direcional Engenharia and Dimed SA

0.27

Correlation Coefficient

Direcional Engenharia  Dimed SA

Modest diversification

The 3 months correlation between Direcional and Dimed is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Direcional Engenharia SA and Dimed SA Distribuidora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimed SA Distribuidora and Direcional Engenharia 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 Direcional Engenharia SA are associated (or correlated) with Dimed SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimed SA Distribuidora has no effect on the direction of Direcional Engenharia i.e., Direcional Engenharia and Dimed SA go up and down completely randomly.

Pair Corralation between Direcional Engenharia and Dimed SA

Assuming the 90 days trading horizon Direcional Engenharia SA is expected to generate 1.22 times more return on investment than Dimed SA. However, Direcional Engenharia is 1.22 times more volatile than Dimed SA Distribuidora. It trades about 0.16 of its potential returns per unit of risk. Dimed SA Distribuidora is currently generating about 0.07 per unit of risk. If you would invest  3,313  in Direcional Engenharia SA on April 22, 2025 and sell it today you would earn a total of  712.00  from holding Direcional Engenharia SA or generate 21.49% return on investment over 90 days.

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

Direcional Engenharia SA  vs.  Dimed SA Distribuidora

Direcional Engenharia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Direcional Engenharia SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Direcional Engenharia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dimed SA Distribuidora

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Direcional Engenharia and Dimed SA

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

The idea behind Direcional Engenharia SA and Dimed SA Distribuidora 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.