Correlation Between Livetech and Minupar Participaes

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Can any of the company-specific risk be diversified away by investing in both Livetech and Minupar 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 Livetech and Minupar Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Livetech da Bahia and Minupar Participaes SA, you can compare the effects of market volatilities on Livetech and Minupar 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 Livetech with a short position of Minupar Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Livetech and Minupar Participaes.

Diversification Opportunities for Livetech and Minupar Participaes

-0.53
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Livetech and Minupar is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Livetech da Bahia and Minupar Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minupar Participaes and Livetech 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 Livetech da Bahia are associated (or correlated) with Minupar Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minupar Participaes has no effect on the direction of Livetech i.e., Livetech and Minupar Participaes go up and down completely randomly.

Pair Corralation between Livetech and Minupar Participaes

Assuming the 90 days trading horizon Livetech da Bahia is expected to generate 0.88 times more return on investment than Minupar Participaes. However, Livetech da Bahia is 1.13 times less risky than Minupar Participaes. It trades about 0.13 of its potential returns per unit of risk. Minupar Participaes SA is currently generating about 0.0 per unit of risk. If you would invest  277.00  in Livetech da Bahia on April 24, 2025 and sell it today you would earn a total of  74.00  from holding Livetech da Bahia or generate 26.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Livetech da Bahia  vs.  Minupar Participaes SA

 Performance 
       Timeline  
Livetech da Bahia 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Livetech da Bahia are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Livetech unveiled solid returns over the last few months and may actually be approaching a breakup point.
Minupar Participaes 

Risk-Adjusted Performance

Very Weak

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

Livetech and Minupar Participaes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Livetech and Minupar Participaes

The main advantage of trading using opposite Livetech and Minupar Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Livetech position performs unexpectedly, Minupar 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 Minupar Participaes will offset losses from the drop in Minupar Participaes' long position.
The idea behind Livetech da Bahia and Minupar 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.
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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