Correlation Between Companhia Habitasul and FDO DE

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

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

Diversification Opportunities for Companhia Habitasul and FDO DE

-0.19

Correlation Coefficient

Companhia Habitasul  FDO DE

Good diversification

The 3 months correlation between Companhia and FDO is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Habitasul de and FDO DE INVEST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDO DE INVEST and Companhia Habitasul 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 Companhia Habitasul de are associated (or correlated) with FDO DE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDO DE INVEST has no effect on the direction of Companhia Habitasul i.e., Companhia Habitasul and FDO DE go up and down completely randomly.

Pair Corralation between Companhia Habitasul and FDO DE

Assuming the 90 days trading horizon Companhia Habitasul de is expected to generate 2.3 times more return on investment than FDO DE. However, Companhia Habitasul is 2.3 times more volatile than FDO DE INVEST. It trades about 0.04 of its potential returns per unit of risk. FDO DE INVEST is currently generating about 0.09 per unit of risk. If you would invest  2,850  in Companhia Habitasul de on December 25, 2024 and sell it today you would earn a total of  140.00  from holding Companhia Habitasul de or generate 4.91% return on investment over 90 days.

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

Companhia Habitasul de  vs.  FDO DE INVEST

Companhia Habitasul

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Companhia Habitasul de are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Companhia Habitasul may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FDO DE INVEST

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FDO DE INVEST are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak primary indicators, FDO DE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Companhia Habitasul and FDO DE

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

The idea behind Companhia Habitasul de and FDO DE INVEST 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.