Correlation Between SPARTA FIAGRO and BB Renda

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

By analyzing existing cross correlation between SPARTA FIAGRO FDO and BB Renda Corporativa, you can compare the effects of market volatilities on SPARTA FIAGRO and BB Renda 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 SPARTA FIAGRO with a short position of BB Renda. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTA FIAGRO and BB Renda.

Diversification Opportunities for SPARTA FIAGRO and BB Renda

0.65

Correlation Coefficient

SPARTA FIAGRO  BB Renda

Poor diversification

The 3 months correlation between SPARTA and BBRC11 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SPARTA FIAGRO FDO and BB Renda Corporativa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Renda Corporativa and SPARTA FIAGRO 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 SPARTA FIAGRO FDO are associated (or correlated) with BB Renda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Renda Corporativa has no effect on the direction of SPARTA FIAGRO i.e., SPARTA FIAGRO and BB Renda go up and down completely randomly.

Pair Corralation between SPARTA FIAGRO and BB Renda

Assuming the 90 days trading horizon SPARTA FIAGRO FDO is expected to generate about the same return on investment as BB Renda Corporativa. But, SPARTA FIAGRO FDO is 1.31 times less risky than BB Renda. It trades about 0.15 of its potential returns per unit of risk. BB Renda Corporativa is currently generating about 0.12 per unit of risk. If you would invest  9,867  in BB Renda Corporativa on December 29, 2024 and sell it today you would earn a total of  723.00  from holding BB Renda Corporativa or generate 7.33% return on investment over 90 days.

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

SPARTA FIAGRO FDO  vs.  BB Renda Corporativa

SPARTA FIAGRO FDO

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPARTA FIAGRO FDO are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, SPARTA FIAGRO may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BB Renda Corporativa

Risk-Adjusted Performance

OK

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

Pair Trading with SPARTA FIAGRO and BB Renda

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

The idea behind SPARTA FIAGRO FDO and BB Renda Corporativa 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.