Correlation Between FDO INV and Kinea Securities

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

Diversification Opportunities for FDO INV and Kinea Securities

0.15

Correlation Coefficient

FDO INV  Kinea Securities

Average diversification

The 3 months correlation between FDO and Kinea is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and Kinea Securities Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Securities 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 Kinea Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Securities Fundo has no effect on the direction of FDO INV i.e., FDO INV and Kinea Securities go up and down completely randomly.

Pair Corralation between FDO INV and Kinea Securities

Assuming the 90 days trading horizon FDO INV is expected to generate 5.85 times less return on investment than Kinea Securities. But when comparing it to its historical volatility, FDO INV IMOB is 7.68 times less risky than Kinea Securities. It trades about 0.22 of its potential returns per unit of risk. Kinea Securities Fundo is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  830.00  in Kinea Securities Fundo on December 4, 2024 and sell it today you would earn a total of  29.00  from holding Kinea Securities Fundo or generate 3.49% return on investment over 90 days.

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

FDO INV IMOB  vs.  Kinea Securities Fundo

FDO INV IMOB

Risk-Adjusted Performance

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 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.

Kinea Securities Fundo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kinea Securities Fundo are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Kinea Securities may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with FDO INV and Kinea Securities

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

The idea behind FDO INV IMOB and Kinea Securities 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.