Correlation Between Walt Disney and Cogna Educao

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

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

Diversification Opportunities for Walt Disney and Cogna Educao

0.55

Correlation Coefficient

Walt Disney  Cogna Educao

Very weak diversification

The 3 months correlation between Walt and Cogna is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Walt Disney and Cogna Educao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogna Educao SA and Walt Disney 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 The Walt Disney are associated (or correlated) with Cogna Educao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogna Educao SA has no effect on the direction of Walt Disney i.e., Walt Disney and Cogna Educao go up and down completely randomly.

Pair Corralation between Walt Disney and Cogna Educao

Assuming the 90 days trading horizon The Walt Disney is expected to generate 0.7 times more return on investment than Cogna Educao. However, The Walt Disney is 1.43 times less risky than Cogna Educao. It trades about 0.24 of its potential returns per unit of risk. Cogna Educao SA is currently generating about 0.04 per unit of risk. If you would invest  3,424  in The Walt Disney on April 24, 2025 and sell it today you would earn a total of  1,031  from holding The Walt Disney or generate 30.11% return on investment over 90 days.

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

The Walt Disney  vs.  Cogna Educao SA

Walt Disney

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Walt Disney are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Walt Disney sustained solid returns over the last few months and may actually be approaching a breakup point.

Cogna Educao SA

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Walt Disney and Cogna Educao

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

The idea behind The Walt Disney and Cogna Educao 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.