Correlation Between Tres Tentos and Cruzeiro

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

By analyzing existing cross correlation between Tres Tentos Agroindustrial and Cruzeiro do Sul, you can compare the effects of market volatilities on Tres Tentos and Cruzeiro 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 Tres Tentos with a short position of Cruzeiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tres Tentos and Cruzeiro.

Diversification Opportunities for Tres Tentos and Cruzeiro

-0.39

Correlation Coefficient

Tres Tentos  Cruzeiro

Very good diversification

The 3 months correlation between Tres and Cruzeiro is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tres Tentos Agroindustrial and Cruzeiro do Sul in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cruzeiro do Sul and Tres Tentos 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 Tres Tentos Agroindustrial are associated (or correlated) with Cruzeiro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cruzeiro do Sul has no effect on the direction of Tres Tentos i.e., Tres Tentos and Cruzeiro go up and down completely randomly.

Pair Corralation between Tres Tentos and Cruzeiro

Assuming the 90 days trading horizon Tres Tentos is expected to generate 2.24 times less return on investment than Cruzeiro. But when comparing it to its historical volatility, Tres Tentos Agroindustrial is 1.33 times less risky than Cruzeiro. It trades about 0.02 of its potential returns per unit of risk. Cruzeiro do Sul is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  330.00  in Cruzeiro do Sul on April 13, 2025 and sell it today you would earn a total of  150.00  from holding Cruzeiro do Sul or generate 45.45% return on investment over 90 days.

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

Tres Tentos Agroindustrial  vs.  Cruzeiro do Sul

Tres Tentos Agroindu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tres Tentos Agroindustrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Cruzeiro do Sul

Risk-Adjusted Performance

Solid

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

Pair Trading with Tres Tentos and Cruzeiro

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

The idea behind Tres Tentos Agroindustrial and Cruzeiro do Sul 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.