Correlation Between LOG Commercial and Movida Participaes

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

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

Diversification Opportunities for LOG Commercial and Movida Participaes

0.34

Correlation Coefficient

LOG Commercial  Movida Participaes

Weak diversification

The 3 months correlation between LOG and Movida is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding LOG Commercial Properties and Movida Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movida Participaes and LOG Commercial 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 LOG Commercial Properties are associated (or correlated) with Movida Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movida Participaes has no effect on the direction of LOG Commercial i.e., LOG Commercial and Movida Participaes go up and down completely randomly.

Pair Corralation between LOG Commercial and Movida Participaes

Assuming the 90 days trading horizon LOG Commercial Properties is expected to generate 0.34 times more return on investment than Movida Participaes. However, LOG Commercial Properties is 2.92 times less risky than Movida Participaes. It trades about 0.01 of its potential returns per unit of risk. Movida Participaes SA is currently generating about -0.02 per unit of risk. If you would invest  1,986  in LOG Commercial Properties on April 24, 2025 and sell it today you would earn a total of  0.00  from holding LOG Commercial Properties or generate 0.0% return on investment over 90 days.

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

LOG Commercial Properties  vs.  Movida Participaes SA

LOG Commercial Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days LOG Commercial Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, LOG Commercial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Movida Participaes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Movida Participaes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Movida Participaes is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with LOG Commercial and Movida Participaes

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

The idea behind LOG Commercial Properties and Movida Participaes 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.