Correlation Between Intelbras and Locaweb Servios

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

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

Diversification Opportunities for Intelbras and Locaweb Servios

0.65

Correlation Coefficient

Intelbras  Locaweb Servios

Poor diversification

The 3 months correlation between Intelbras and Locaweb is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Intelbras SA and Locaweb Servios de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locaweb Servios de and Intelbras 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 Intelbras SA are associated (or correlated) with Locaweb Servios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locaweb Servios de has no effect on the direction of Intelbras i.e., Intelbras and Locaweb Servios go up and down completely randomly.

Pair Corralation between Intelbras and Locaweb Servios

Assuming the 90 days trading horizon Intelbras is expected to generate 1.02 times less return on investment than Locaweb Servios. But when comparing it to its historical volatility, Intelbras SA is 1.31 times less risky than Locaweb Servios. It trades about 0.05 of its potential returns per unit of risk. Locaweb Servios de is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  379.00  in Locaweb Servios de on April 24, 2025 and sell it today you would earn a total of  16.00  from holding Locaweb Servios de or generate 4.22% return on investment over 90 days.

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

Intelbras SA   vs.  Locaweb Servios de

Intelbras SA

Risk-Adjusted Performance

Insignificant

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

Locaweb Servios de

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Locaweb Servios de are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Locaweb Servios may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Intelbras and Locaweb Servios

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

The idea behind Intelbras SA and Locaweb Servios de 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.