Correlation Between Grendene and Fleury SA

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

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

Diversification Opportunities for Grendene and Fleury SA

0.14

Correlation Coefficient

Grendene  Fleury SA

Average diversification

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

Pair Corralation between Grendene and Fleury SA

Assuming the 90 days trading horizon Grendene is expected to generate 3.2 times less return on investment than Fleury SA. In addition to that, Grendene is 1.63 times more volatile than Fleury SA. It trades about 0.03 of its total potential returns per unit of risk. Fleury SA is currently generating about 0.14 per unit of volatility. If you would invest  1,154  in Fleury SA on March 23, 2025 and sell it today you would earn a total of  152.00  from holding Fleury SA or generate 13.17% return on investment over 90 days.

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

Grendene SA  vs.  Fleury SA

Grendene SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grendene SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Grendene is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fleury SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fleury SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fleury SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grendene and Fleury SA

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

The idea behind Grendene SA and Fleury 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.