Question

Determine whether the performance of your foreign stock(Eletrobras, ticker: EBR) is driven by the corresponding market where the firm is based (^BVSP). compare and assess the relationship between the Market index movements in the stocks price movements. Explain whether the stocks price movements appear to be driven by the local market conditions.

correction ticker is ELET6.SA

please answer question based on the chart given.

Answer 1

Hi I will be answering the question by uploading handwritten answer.

The question talks about relationship between a stock and market.

Solution : There are 5 months in the question so let us perform the analysis month noise. July : "Stock & Market moved in opposite direction ie. when stock was donon by 5%, market to moved up by 5% Aug: Stock was not in line with market and outperformed the market Seb: Stock moved in line with market, where stock outpesyouned of the market. Oct : Stock witnessed a downfall (0%) when market was ub by approximately 5% Novo Stock went done while the market remained in a positive mode. Overall the performance of Stock was on a decline compared to the market. Reason being that both (market and stock). Started off at 0/reton, by the end of Nov stock earned negativ return(2.841/6) while market bas earning a positive return. (10457