Correlation Between HEDGE Brasil and LIFE CAPITAL
Can any of the company-specific risk be diversified away by investing in both HEDGE Brasil and LIFE CAPITAL 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 HEDGE Brasil and LIFE CAPITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEDGE Brasil Shopping and LIFE CAPITAL PARTNERS, you can compare the effects of market volatilities on HEDGE Brasil and LIFE CAPITAL 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 HEDGE Brasil with a short position of LIFE CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEDGE Brasil and LIFE CAPITAL.
Diversification Opportunities for HEDGE Brasil and LIFE CAPITAL
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HEDGE and LIFE is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding HEDGE Brasil Shopping and LIFE CAPITAL PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE CAPITAL PARTNERS and HEDGE Brasil 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 HEDGE Brasil Shopping are associated (or correlated) with LIFE CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE CAPITAL PARTNERS has no effect on the direction of HEDGE Brasil i.e., HEDGE Brasil and LIFE CAPITAL go up and down completely randomly.
Pair Corralation between HEDGE Brasil and LIFE CAPITAL
Assuming the 90 days trading horizon HEDGE Brasil Shopping is expected to generate 0.78 times more return on investment than LIFE CAPITAL. However, HEDGE Brasil Shopping is 1.28 times less risky than LIFE CAPITAL. It trades about -0.2 of its potential returns per unit of risk. LIFE CAPITAL PARTNERS is currently generating about -0.29 per unit of risk. If you would invest 19,345 in HEDGE Brasil Shopping on September 15, 2024 and sell it today you would lose (1,234) from holding HEDGE Brasil Shopping or give up 6.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
HEDGE Brasil Shopping vs. LIFE CAPITAL PARTNERS
Performance |
Timeline |
HEDGE Brasil Shopping |
LIFE CAPITAL PARTNERS |
HEDGE Brasil and LIFE CAPITAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HEDGE Brasil and LIFE CAPITAL
The main advantage of trading using opposite HEDGE Brasil and LIFE CAPITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEDGE Brasil position performs unexpectedly, LIFE CAPITAL 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 LIFE CAPITAL will offset losses from the drop in LIFE CAPITAL's long position.HEDGE Brasil vs. BTG Pactual Logstica | HEDGE Brasil vs. Plano Plano Desenvolvimento | HEDGE Brasil vs. Cable One | HEDGE Brasil vs. ATMA Participaes SA |
LIFE CAPITAL vs. Scp Fundo De | LIFE CAPITAL vs. Hsi Logistica Fundo | LIFE CAPITAL vs. TRX Renda Fundo | LIFE CAPITAL vs. REAL INVESTOR FUNDO |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |