Correlation Between CM Hospitalar and Tres Tentos

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

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

Diversification Opportunities for CM Hospitalar and Tres Tentos

-0.31

Correlation Coefficient

CM Hospitalar  Tres Tentos

Very good diversification

The 3 months correlation between VVEO3 and Tres is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA and Tres Tentos Agroindustrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tres Tentos Agroindu and CM Hospitalar 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 CM Hospitalar SA are associated (or correlated) with Tres Tentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tres Tentos Agroindu has no effect on the direction of CM Hospitalar i.e., CM Hospitalar and Tres Tentos go up and down completely randomly.

Pair Corralation between CM Hospitalar and Tres Tentos

Assuming the 90 days trading horizon CM Hospitalar SA is expected to generate 1.91 times more return on investment than Tres Tentos. However, CM Hospitalar is 1.91 times more volatile than Tres Tentos Agroindustrial. It trades about -0.02 of its potential returns per unit of risk. Tres Tentos Agroindustrial is currently generating about -0.2 per unit of risk. If you would invest  124.00  in CM Hospitalar SA on April 20, 2025 and sell it today you would lose (10.00) from holding CM Hospitalar SA or give up 8.06% of portfolio value over 90 days.

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

CM Hospitalar SA  vs.  Tres Tentos Agroindustrial

CM Hospitalar SA

Risk-Adjusted Performance

Very Weak

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

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CM Hospitalar and Tres Tentos

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

The idea behind CM Hospitalar SA and Tres Tentos Agroindustrial 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.