Correlation Between Fundo De and Bilibili

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

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

Diversification Opportunities for Fundo De and Bilibili

-0.46

Correlation Coefficient

Fundo De  Bilibili

Very good diversification

The 3 months correlation between Fundo and Bilibili is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fundo de Investimento and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili and Fundo De 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 Fundo de Investimento are associated (or correlated) with Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Fundo De i.e., Fundo De and Bilibili go up and down completely randomly.

Pair Corralation between Fundo De and Bilibili

Assuming the 90 days trading horizon Fundo de Investimento is expected to under-perform the Bilibili. But the fund apears to be less risky and, when comparing its historical volatility, Fundo de Investimento is 9.01 times less risky than Bilibili. The fund trades about -0.2 of its potential returns per unit of risk. The Bilibili is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,726  in Bilibili on September 5, 2024 and sell it today you would earn a total of  603.00  from holding Bilibili or generate 34.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Fundo de Investimento  vs.  Bilibili

Fundo de Investimento

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundo de Investimento has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Bilibili

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bilibili are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Bilibili sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fundo De and Bilibili

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

The idea behind Fundo de Investimento and Bilibili 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.