Correlation Between Lupatech and Inepar SA

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

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

Diversification Opportunities for Lupatech and Inepar SA

-0.14

Correlation Coefficient

Lupatech  Inepar SA

Good diversification

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

Pair Corralation between Lupatech and Inepar SA

Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Inepar SA. But the stock apears to be less risky and, when comparing its historical volatility, Lupatech SA is 2.62 times less risky than Inepar SA. The stock trades about -0.07 of its potential returns per unit of risk. The Inepar SA Indstria is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  150.00  in Inepar SA Indstria on April 24, 2025 and sell it today you would lose (5.00) from holding Inepar SA Indstria or give up 3.33% of portfolio value over 90 days.

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

Lupatech SA  vs.  Inepar SA Indstria

Lupatech SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lupatech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Inepar SA Indstria

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inepar SA Indstria are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Inepar SA 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 Lupatech and Inepar SA

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

The idea behind Lupatech SA and Inepar SA Indstria 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.