Correlation Between FDO INV and FDO INV

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

By analyzing existing cross correlation between FDO INV CAD and FDO INV IMOB, you can compare the effects of market volatilities on FDO INV and FDO INV 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 FDO INV with a short position of FDO INV. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDO INV and FDO INV.

Diversification Opportunities for FDO INV and FDO INV

-0.79

Correlation Coefficient

FDO INV  FDO INV

Pay attention - limited upside

The 3 months correlation between FDO and FDO is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV CAD and FDO INV IMOB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDO INV IMOB and FDO INV 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 FDO INV CAD are associated (or correlated) with FDO INV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDO INV IMOB has no effect on the direction of FDO INV i.e., FDO INV and FDO INV go up and down completely randomly.

Pair Corralation between FDO INV and FDO INV

Assuming the 90 days trading horizon FDO INV CAD is expected to under-perform the FDO INV. But the fund apears to be less risky and, when comparing its historical volatility, FDO INV CAD is 1.55 times less risky than FDO INV. The fund trades about -0.02 of its potential returns per unit of risk. The FDO INV IMOB is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  908.00  in FDO INV IMOB on September 15, 2024 and sell it today you would earn a total of  653.00  from holding FDO INV IMOB or generate 71.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	27.48%
Values	Daily Returns

FDO INV CAD  vs.  FDO INV IMOB

FDO INV CAD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FDO INV CAD has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

FDO INV IMOB

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FDO INV IMOB are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, FDO INV sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FDO INV and FDO INV

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

The idea behind FDO INV CAD and FDO INV IMOB 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.