Correlation Between PBG SA and Allpark Empreendimentos

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

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

Diversification Opportunities for PBG SA and Allpark Empreendimentos

0.74

Correlation Coefficient

PBG SA  Allpark Empreendimentos

Poor diversification

The 3 months correlation between PBG and Allpark is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PBG SA and Allpark Empreendimentos Partic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allpark Empreendimentos and PBG SA 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 PBG SA are associated (or correlated) with Allpark Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allpark Empreendimentos has no effect on the direction of PBG SA i.e., PBG SA and Allpark Empreendimentos go up and down completely randomly.

Pair Corralation between PBG SA and Allpark Empreendimentos

Assuming the 90 days trading horizon PBG SA is expected to generate 1.44 times more return on investment than Allpark Empreendimentos. However, PBG SA is 1.44 times more volatile than Allpark Empreendimentos Participaes. It trades about 0.11 of its potential returns per unit of risk. Allpark Empreendimentos Participaes is currently generating about 0.08 per unit of risk. If you would invest  371.00  in PBG SA on March 26, 2025 and sell it today you would earn a total of  85.00  from holding PBG SA or generate 22.91% return on investment over 90 days.

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

PBG SA  vs.  Allpark Empreendimentos Partic

PBG SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PBG SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PBG SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Allpark Empreendimentos

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Allpark Empreendimentos Participaes are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Allpark Empreendimentos unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PBG SA and Allpark Empreendimentos

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

The idea behind PBG SA and Allpark Empreendimentos Participaes 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.