Correlation Between CSHG Renda and CSHG Imobiliario

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

By analyzing existing cross correlation between CSHG Renda Urbana and CSHG Imobiliario Fof, you can compare the effects of market volatilities on CSHG Renda and CSHG Imobiliario 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 Renda with a short position of CSHG Imobiliario. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSHG Renda and CSHG Imobiliario.

Diversification Opportunities for CSHG Renda and CSHG Imobiliario

0.59

Correlation Coefficient

CSHG Renda  CSHG Imobiliario

Very weak diversification

The 3 months correlation between CSHG and CSHG is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CSHG Renda Urbana and CSHG Imobiliario Fof in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSHG Imobiliario Fof and CSHG Renda 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 Renda Urbana are associated (or correlated) with CSHG Imobiliario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSHG Imobiliario Fof has no effect on the direction of CSHG Renda i.e., CSHG Renda and CSHG Imobiliario go up and down completely randomly.

Pair Corralation between CSHG Renda and CSHG Imobiliario

Assuming the 90 days trading horizon CSHG Renda Urbana is expected to generate 0.75 times more return on investment than CSHG Imobiliario. However, CSHG Renda Urbana is 1.34 times less risky than CSHG Imobiliario. It trades about -0.05 of its potential returns per unit of risk. CSHG Imobiliario Fof is currently generating about -0.07 per unit of risk. If you would invest  11,742  in CSHG Renda Urbana on October 24, 2024 and sell it today you would lose (442.00) from holding CSHG Renda Urbana or give up 3.76% of portfolio value over 90 days.

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

CSHG Renda Urbana  vs.  CSHG Imobiliario Fof

CSHG Renda Urbana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSHG Renda Urbana has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, CSHG Renda is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CSHG Imobiliario Fof

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSHG Imobiliario Fof has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's technical and fundamental 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 Renda and CSHG Imobiliario

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

The idea behind CSHG Renda Urbana and CSHG Imobiliario Fof 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..