Correlation Between Naranja Renta and Hashflow USD

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

By analyzing existing cross correlation between Naranja Renta Fija and Hashflow USD, you can compare the effects of market volatilities on Naranja Renta and Hashflow USD 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 Naranja Renta with a short position of Hashflow USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naranja Renta and Hashflow USD.

Diversification Opportunities for Naranja Renta and Hashflow USD

0.69

Correlation Coefficient

Naranja Renta  Hashflow USD

Poor diversification

The 3 months correlation between Naranja and Hashflow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Naranja Renta Fija and Hashflow USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hashflow USD and Naranja Renta 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 Naranja Renta Fija are associated (or correlated) with Hashflow USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hashflow USD has no effect on the direction of Naranja Renta i.e., Naranja Renta and Hashflow USD go up and down completely randomly.

Pair Corralation between Naranja Renta and Hashflow USD

Assuming the 90 days trading horizon Naranja Renta is expected to generate 15.42 times less return on investment than Hashflow USD. But when comparing it to its historical volatility, Naranja Renta Fija is 6.57 times less risky than Hashflow USD. It trades about 0.08 of its potential returns per unit of risk. Hashflow USD is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,326  in Hashflow USD on October 12, 2024 and sell it today you would earn a total of  121.00  from holding Hashflow USD or generate 9.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.88%
Values	Daily Returns

Naranja Renta Fija  vs.  Hashflow USD

Naranja Renta Fija

Risk-Adjusted Performance

0 of 100

Modest

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

Hashflow USD

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Hashflow USD has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat weak basic indicators, Hashflow USD may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Naranja Renta and Hashflow USD

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

The idea behind Naranja Renta Fija and Hashflow USD 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.