Correlation Between Companhia Habitasul and Kinea Creditas

Can any of the company-specific risk be diversified away by investing in both Companhia Habitasul and Kinea Creditas 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 Kinea Creditas 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 Kinea Creditas Fundo, you can compare the effects of market volatilities on Companhia Habitasul and Kinea Creditas 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 Kinea Creditas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Habitasul and Kinea Creditas.

Diversification Opportunities for Companhia Habitasul and Kinea Creditas

0.1

Correlation Coefficient

Companhia Habitasul  Kinea Creditas

Average diversification

The 3 months correlation between Companhia and Kinea is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Habitasul de and Kinea Creditas Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Creditas Fundo 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 Kinea Creditas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Creditas Fundo has no effect on the direction of Companhia Habitasul i.e., Companhia Habitasul and Kinea Creditas go up and down completely randomly.

Pair Corralation between Companhia Habitasul and Kinea Creditas

Assuming the 90 days trading horizon Companhia Habitasul de is expected to generate 1.49 times more return on investment than Kinea Creditas. However, Companhia Habitasul is 1.49 times more volatile than Kinea Creditas Fundo. It trades about 0.04 of its potential returns per unit of risk. Kinea Creditas Fundo is currently generating about 0.05 per unit of risk. If you would invest  2,902  in Companhia Habitasul de on December 3, 2024 and sell it today you would earn a total of  98.00  from holding Companhia Habitasul de or generate 3.38% return on investment over 90 days.

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

Companhia Habitasul de  vs.  Kinea Creditas Fundo

Companhia Habitasul

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Companhia Habitasul de are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Companhia Habitasul is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Kinea Creditas Fundo

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinea Creditas Fundo are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Kinea Creditas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Companhia Habitasul and Kinea Creditas

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

The idea behind Companhia Habitasul de and Kinea Creditas Fundo 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.