Correlation Between Habitat Ii and Kinea Oportunidades

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

By analyzing existing cross correlation between Habitat Ii and Kinea Oportunidades Real, you can compare the effects of market volatilities on Habitat Ii and Kinea Oportunidades 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 Habitat Ii with a short position of Kinea Oportunidades. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habitat Ii and Kinea Oportunidades.

Diversification Opportunities for Habitat Ii and Kinea Oportunidades

0.5

Correlation Coefficient

Habitat Ii  Kinea Oportunidades

Very weak diversification

The 3 months correlation between Habitat and Kinea is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Habitat Ii and Kinea Oportunidades Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Oportunidades Real and Habitat Ii 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 Habitat Ii are associated (or correlated) with Kinea Oportunidades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Oportunidades Real has no effect on the direction of Habitat Ii i.e., Habitat Ii and Kinea Oportunidades go up and down completely randomly.

Pair Corralation between Habitat Ii and Kinea Oportunidades

Assuming the 90 days trading horizon Habitat Ii is expected to generate 0.89 times more return on investment than Kinea Oportunidades. However, Habitat Ii is 1.13 times less risky than Kinea Oportunidades. It trades about -0.01 of its potential returns per unit of risk. Kinea Oportunidades Real is currently generating about -0.05 per unit of risk. If you would invest  7,760  in Habitat Ii on November 20, 2024 and sell it today you would lose (530.00) from holding Habitat Ii or give up 6.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	76.8%
Values	Daily Returns

Habitat Ii   vs.  Kinea Oportunidades Real

Habitat Ii

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Habitat Ii are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental drivers, Habitat Ii is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinea Oportunidades Real

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Habitat Ii and Kinea Oportunidades

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

The idea behind Habitat Ii and Kinea Oportunidades Real 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.