Correlation Between Itasa Investimentos and Baumer SA

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

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

Diversification Opportunities for Itasa Investimentos and Baumer SA

0.17

Correlation Coefficient

Itasa Investimentos  Baumer SA

Average diversification

The 3 months correlation between Itasa and Baumer is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Itasa Investimentos and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA and Itasa Investimentos 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 Itasa Investimentos are associated (or correlated) with Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of Itasa Investimentos i.e., Itasa Investimentos and Baumer SA go up and down completely randomly.

Pair Corralation between Itasa Investimentos and Baumer SA

Assuming the 90 days trading horizon Itasa Investimentos is expected to generate 22.61 times less return on investment than Baumer SA. But when comparing it to its historical volatility, Itasa Investimentos is 2.01 times less risky than Baumer SA. It trades about 0.01 of its potential returns per unit of risk. Baumer SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,300  in Baumer SA on April 25, 2025 and sell it today you would earn a total of  280.00  from holding Baumer SA or generate 21.54% return on investment over 90 days.

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

Itasa Investimentos  vs.  Baumer SA

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.

Baumer SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baumer SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Baumer SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Itasa Investimentos and Baumer SA

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

The idea behind Itasa Investimentos and Baumer 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.