Correlation Between Distribuidora Internacional and Fluidra

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

By analyzing existing cross correlation between Distribuidora Internacional de and Fluidra, you can compare the effects of market volatilities on Distribuidora Internacional and Fluidra 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 Distribuidora Internacional with a short position of Fluidra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distribuidora Internacional and Fluidra.

Diversification Opportunities for Distribuidora Internacional and Fluidra

-0.32

Correlation Coefficient

Distribuidora Internacional  Fluidra

Very good diversification

The 3 months correlation between Distribuidora and Fluidra is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Distribuidora Internacional de and Fluidra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluidra and Distribuidora Internacional 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 Distribuidora Internacional de are associated (or correlated) with Fluidra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluidra has no effect on the direction of Distribuidora Internacional i.e., Distribuidora Internacional and Fluidra go up and down completely randomly.

Pair Corralation between Distribuidora Internacional and Fluidra

Assuming the 90 days trading horizon Distribuidora Internacional de is expected to generate 2.05 times more return on investment than Fluidra. However, Distribuidora Internacional is 2.05 times more volatile than Fluidra. It trades about 0.19 of its potential returns per unit of risk. Fluidra is currently generating about -0.1 per unit of risk. If you would invest  1,310  in Distribuidora Internacional de on November 27, 2024 and sell it today you would earn a total of  500.00  from holding Distribuidora Internacional de or generate 38.17% return on investment over 90 days.

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

Distribuidora Internacional de  vs.  Fluidra

Distribuidora Internacional

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Distribuidora Internacional de are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Distribuidora Internacional exhibited solid returns over the last few months and may actually be approaching a breakup point.

Fluidra

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fluidra has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Distribuidora Internacional and Fluidra

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

The idea behind Distribuidora Internacional de and Fluidra 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.