Correlation Between FDO INV and Hsi Ativos

Can any of the company-specific risk be diversified away by investing in both FDO INV and Hsi Ativos 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 Hsi Ativos 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 Hsi Ativos Financeiros, you can compare the effects of market volatilities on FDO INV and Hsi Ativos 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 Hsi Ativos. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDO INV and Hsi Ativos.

Diversification Opportunities for FDO INV and Hsi Ativos

0.47

Correlation Coefficient

FDO INV  Hsi Ativos

Very weak diversification

The 3 months correlation between FDO and Hsi is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and Hsi Ativos Financeiros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsi Ativos Financeiros 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 Hsi Ativos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsi Ativos Financeiros has no effect on the direction of FDO INV i.e., FDO INV and Hsi Ativos go up and down completely randomly.

Pair Corralation between FDO INV and Hsi Ativos

Assuming the 90 days trading horizon FDO INV is expected to generate 11.97 times less return on investment than Hsi Ativos. But when comparing it to its historical volatility, FDO INV IMOB is 14.54 times less risky than Hsi Ativos. It trades about 0.27 of its potential returns per unit of risk. Hsi Ativos Financeiros is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  6,155  in Hsi Ativos Financeiros on December 20, 2024 and sell it today you would earn a total of  1,648  from holding Hsi Ativos Financeiros or generate 26.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

FDO INV IMOB  vs.  Hsi Ativos Financeiros

FDO INV IMOB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FDO INV IMOB are ranked lower than 20 (%) 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.

Hsi Ativos Financeiros

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hsi Ativos Financeiros are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Hsi Ativos sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FDO INV and Hsi Ativos

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

The idea behind FDO INV IMOB and Hsi Ativos Financeiros 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.