Correlation Between Cshg Jhsf and Fator Verit

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

By analyzing existing cross correlation between Cshg Jhsf Prime and Fator Verit Fundo, you can compare the effects of market volatilities on Cshg Jhsf and Fator Verit 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 Cshg Jhsf with a short position of Fator Verit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cshg Jhsf and Fator Verit.

Diversification Opportunities for Cshg Jhsf and Fator Verit

0.68

Correlation Coefficient

Cshg Jhsf  Fator Verit

Poor diversification

The 3 months correlation between Cshg and Fator is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cshg Jhsf Prime and Fator Verit Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fator Verit Fundo and Cshg Jhsf 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 Cshg Jhsf Prime are associated (or correlated) with Fator Verit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fator Verit Fundo has no effect on the direction of Cshg Jhsf i.e., Cshg Jhsf and Fator Verit go up and down completely randomly.

Pair Corralation between Cshg Jhsf and Fator Verit

Assuming the 90 days trading horizon Cshg Jhsf Prime is expected to under-perform the Fator Verit. In addition to that, Cshg Jhsf is 10.99 times more volatile than Fator Verit Fundo. It trades about -0.12 of its total potential returns per unit of risk. Fator Verit Fundo is currently generating about -0.2 per unit of volatility. If you would invest  8,865  in Fator Verit Fundo on August 30, 2024 and sell it today you would lose (768.00) from holding Fator Verit Fundo or give up 8.66% of portfolio value over 90 days.

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

Cshg Jhsf Prime  vs.  Fator Verit Fundo

Cshg Jhsf Prime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cshg Jhsf Prime has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the fund investors.

Fator Verit Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fator Verit Fundo 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 Cshg Jhsf and Fator Verit

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

The idea behind Cshg Jhsf Prime and Fator Verit 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 Transaction History module to view history of all your transactions and understand their impact on performance.