Correlation Between Lojas Renner and IRPC Public

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

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

Diversification Opportunities for Lojas Renner and IRPC Public

-0.59

Correlation Coefficient

Lojas Renner  IRPC Public

Excellent diversification

The 3 months correlation between Lojas and IRPC is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lojas Renner SA and IRPC Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRPC Public and Lojas Renner 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 Lojas Renner SA are associated (or correlated) with IRPC Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRPC Public has no effect on the direction of Lojas Renner i.e., Lojas Renner and IRPC Public go up and down completely randomly.

Pair Corralation between Lojas Renner and IRPC Public

Assuming the 90 days trading horizon Lojas Renner SA is expected to generate 0.58 times more return on investment than IRPC Public. However, Lojas Renner SA is 1.73 times less risky than IRPC Public. It trades about 0.2 of its potential returns per unit of risk. IRPC Public is currently generating about 0.07 per unit of risk. If you would invest  1,351  in Lojas Renner SA on April 24, 2025 and sell it today you would earn a total of  391.00  from holding Lojas Renner SA or generate 28.94% return on investment over 90 days.

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

Lojas Renner SA  vs.  IRPC Public

Lojas Renner SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lojas Renner SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lojas Renner unveiled solid returns over the last few months and may actually be approaching a breakup point.

IRPC Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in IRPC Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, IRPC Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lojas Renner and IRPC Public

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

The idea behind Lojas Renner SA and IRPC Public 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.