Correlation Between NOS SGPS and Futebol Clube

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

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

Diversification Opportunities for NOS SGPS and Futebol Clube

0.05

Correlation Coefficient

NOS SGPS  Futebol Clube

Significant diversification

The 3 months correlation between NOS and Futebol is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NOS SGPS SA and Futebol Clube do in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futebol Clube do and NOS SGPS 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 NOS SGPS SA are associated (or correlated) with Futebol Clube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futebol Clube do has no effect on the direction of NOS SGPS i.e., NOS SGPS and Futebol Clube go up and down completely randomly.

Pair Corralation between NOS SGPS and Futebol Clube

Assuming the 90 days trading horizon NOS SGPS SA is expected to under-perform the Futebol Clube. But the stock apears to be less risky and, when comparing its historical volatility, NOS SGPS SA is 4.1 times less risky than Futebol Clube. The stock trades about -0.03 of its potential returns per unit of risk. The Futebol Clube do is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  102.00  in Futebol Clube do on April 25, 2025 and sell it today you would earn a total of  14.00  from holding Futebol Clube do or generate 13.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NOS SGPS SA  vs.  Futebol Clube do

NOS SGPS SA

Risk-Adjusted Performance

Very Weak

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

Futebol Clube do

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Futebol Clube do are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Futebol Clube unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NOS SGPS and Futebol Clube

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

The idea behind NOS SGPS SA and Futebol Clube do 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .