Correlation Between FDO INV and CSHG Real

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

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

Diversification Opportunities for FDO INV and CSHG Real

-0.05

Correlation Coefficient

FDO INV  CSHG Real

Good diversification

The 3 months correlation between FDO and CSHG is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and CSHG Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSHG Real Estate 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 IMOB are associated (or correlated) with CSHG Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSHG Real Estate has no effect on the direction of FDO INV i.e., FDO INV and CSHG Real go up and down completely randomly.

Pair Corralation between FDO INV and CSHG Real

Assuming the 90 days trading horizon FDO INV IMOB is expected to under-perform the CSHG Real. But the fund apears to be less risky and, when comparing its historical volatility, FDO INV IMOB is 51.35 times less risky than CSHG Real. The fund trades about -0.24 of its potential returns per unit of risk. The CSHG Real Estate is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,726  in CSHG Real Estate on October 9, 2024 and sell it today you would earn a total of  288.00  from holding CSHG Real Estate or generate 2.96% return on investment over 90 days.

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

FDO INV IMOB  vs.  CSHG Real Estate

FDO INV IMOB

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FDO INV IMOB are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, FDO INV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CSHG Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with FDO INV and CSHG Real

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

The idea behind FDO INV IMOB and CSHG 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.

Check out your portfolio center.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.