Correlation Between Porto Seguro and NetEase

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

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

Diversification Opportunities for Porto Seguro and NetEase

0.0

Correlation Coefficient

Porto Seguro  NetEase

Pay attention - limited upside

The 3 months correlation between Porto and NetEase is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Porto Seguro SA and NetEase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetEase and Porto Seguro 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 Porto Seguro SA are associated (or correlated) with NetEase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetEase has no effect on the direction of Porto Seguro i.e., Porto Seguro and NetEase go up and down completely randomly.

Pair Corralation between Porto Seguro and NetEase

If you would invest  4,148  in Porto Seguro SA on April 24, 2025 and sell it today you would earn a total of  1,062  from holding Porto Seguro SA or generate 25.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Porto Seguro SA  vs.  NetEase

Porto Seguro SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Porto Seguro SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Porto Seguro unveiled solid returns over the last few months and may actually be approaching a breakup point.

NetEase

Risk-Adjusted Performance

Good

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

Pair Trading with Porto Seguro and NetEase

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

The idea behind Porto Seguro SA and NetEase 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.