Correlation Between CSHG Renda and CSHG Real

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

Diversification Opportunities for CSHG Renda and CSHG Real

0.71

Correlation Coefficient

CSHG Renda  CSHG Real

Poor diversification

The 3 months correlation between CSHG and CSHG is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CSHG Renda Urbana and CSHG Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSHG Real Estate 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 Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSHG Real Estate has no effect on the direction of CSHG Renda i.e., CSHG Renda and CSHG Real go up and down completely randomly.

Pair Corralation between CSHG Renda and CSHG Real

Assuming the 90 days trading horizon CSHG Renda is expected to generate 1.6 times less return on investment than CSHG Real. But when comparing it to its historical volatility, CSHG Renda Urbana is 1.72 times less risky than CSHG Real. It trades about 0.06 of its potential returns per unit of risk. CSHG Real Estate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  9,947  in CSHG Real Estate on December 23, 2024 and sell it today you would earn a total of  465.00  from holding CSHG Real Estate or generate 4.67% return on investment over 90 days.

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

CSHG Renda Urbana  vs.  CSHG Real Estate

CSHG Renda Urbana

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CSHG Renda Urbana are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. 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 Real Estate

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CSHG Real Estate are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, CSHG Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CSHG Renda and CSHG Real

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

The idea behind CSHG Renda Urbana and CSHG Real Estate 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.