Correlation Between Brazil Real and Performa Real

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

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

Diversification Opportunities for Brazil Real and Performa Real

0.0

Correlation Coefficient

Brazil Real  Performa Real

Pay attention - limited upside

The 3 months correlation between Brazil and Performa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brazil Real Estate and Performa Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performa Real Estate and Brazil Real 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 Brazil Real Estate are associated (or correlated) with Performa Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performa Real Estate has no effect on the direction of Brazil Real i.e., Brazil Real and Performa Real go up and down completely randomly.

Pair Corralation between Brazil Real and Performa Real

If you would invest (100.00) in Brazil Real Estate on October 9, 2024 and sell it today you would earn a total of  100.00  from holding Brazil Real Estate or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Brazil Real Estate  vs.  Performa Real Estate

Brazil Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Performa Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Brazil Real and Performa Real

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

The idea behind Brazil Real Estate and Performa Real Estate 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.