Correlation Between Fica Empreendimentos and BMEB4F

Can any of the company-specific risk be diversified away by investing in both Fica Empreendimentos and BMEB4F 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 Fica Empreendimentos and BMEB4F into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fica Empreendimentos Imobiliarios and BMEB4F, you can compare the effects of market volatilities on Fica Empreendimentos and BMEB4F 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 Fica Empreendimentos with a short position of BMEB4F. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fica Empreendimentos and BMEB4F.

Diversification Opportunities for Fica Empreendimentos and BMEB4F

-0.44

Correlation Coefficient

Fica Empreendimentos  BMEB4F

Very good diversification

The 3 months correlation between Fica and BMEB4F is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fica Empreendimentos Imobiliar and BMEB4F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMEB4F and Fica Empreendimentos 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 Fica Empreendimentos Imobiliarios are associated (or correlated) with BMEB4F. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMEB4F has no effect on the direction of Fica Empreendimentos i.e., Fica Empreendimentos and BMEB4F go up and down completely randomly.

Pair Corralation between Fica Empreendimentos and BMEB4F

Assuming the 90 days trading horizon Fica Empreendimentos Imobiliarios is expected to under-perform the BMEB4F. In addition to that, Fica Empreendimentos is 1.2 times more volatile than BMEB4F. It trades about -0.01 of its total potential returns per unit of risk. BMEB4F is currently generating about 0.01 per unit of volatility. If you would invest  3,801  in BMEB4F on December 24, 2024 and sell it today you would earn a total of  13.00  from holding BMEB4F or generate 0.34% return on investment over 90 days.

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

Fica Empreendimentos Imobiliar  vs.  BMEB4F

Fica Empreendimentos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fica Empreendimentos Imobiliarios has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fica Empreendimentos is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BMEB4F

Risk-Adjusted Performance

Very Weak

Over the last 90 days BMEB4F has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, BMEB4F is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fica Empreendimentos and BMEB4F

The main advantage of trading using opposite Fica Empreendimentos and BMEB4F positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fica Empreendimentos position performs unexpectedly, BMEB4F 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 BMEB4F will offset losses from the drop in BMEB4F's long position.

The idea behind Fica Empreendimentos Imobiliarios and BMEB4F 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.