Correlation Between FDO INV and Hsi Logistica

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

Diversification Opportunities for FDO INV and Hsi Logistica

0.3

Correlation Coefficient

FDO INV  Hsi Logistica

Weak diversification

The 3 months correlation between FDO and Hsi is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and Hsi Logistica Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsi Logistica Fundo 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 Logistica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsi Logistica Fundo has no effect on the direction of FDO INV i.e., FDO INV and Hsi Logistica go up and down completely randomly.

Pair Corralation between FDO INV and Hsi Logistica

Assuming the 90 days trading horizon FDO INV is expected to generate 4.63 times less return on investment than Hsi Logistica. But when comparing it to its historical volatility, FDO INV IMOB is 9.83 times less risky than Hsi Logistica. It trades about 0.26 of its potential returns per unit of risk. Hsi Logistica Fundo is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  7,513  in Hsi Logistica Fundo on December 29, 2024 and sell it today you would earn a total of  716.00  from holding Hsi Logistica Fundo or generate 9.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

FDO INV IMOB  vs.  Hsi Logistica Fundo

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 Logistica Fundo

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hsi Logistica Fundo are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak essential indicators, Hsi Logistica may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with FDO INV and Hsi Logistica

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

The idea behind FDO INV IMOB and Hsi Logistica Fundo 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.