Correlation Between Locaweb Servios and Comcast

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

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

Diversification Opportunities for Locaweb Servios and Comcast

-0.5

Correlation Coefficient

Locaweb Servios  Comcast

Very good diversification

The 3 months correlation between Locaweb and Comcast is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Locaweb Servios de and Comcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast and Locaweb Servios 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 Locaweb Servios de are associated (or correlated) with Comcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast has no effect on the direction of Locaweb Servios i.e., Locaweb Servios and Comcast go up and down completely randomly.

Pair Corralation between Locaweb Servios and Comcast

Assuming the 90 days trading horizon Locaweb Servios de is expected to generate 1.96 times more return on investment than Comcast. However, Locaweb Servios is 1.96 times more volatile than Comcast. It trades about 0.06 of its potential returns per unit of risk. Comcast is currently generating about -0.01 per unit of risk. If you would invest  352.00  in Locaweb Servios de on April 22, 2025 and sell it today you would earn a total of  29.00  from holding Locaweb Servios de or generate 8.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Locaweb Servios de  vs.  Comcast

Locaweb Servios de

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Locaweb Servios de are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Locaweb Servios may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Comcast

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comcast has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Comcast is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Locaweb Servios and Comcast

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

The idea behind Locaweb Servios de and Comcast 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.