Correlation Between Hedge Real and Fundo De

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

By analyzing existing cross correlation between Hedge Real Estate and Fundo de Investimento, you can compare the effects of market volatilities on Hedge Real and Fundo De 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 Real with a short position of Fundo De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hedge Real and Fundo De.

Diversification Opportunities for Hedge Real and Fundo De

0.19

Correlation Coefficient

Hedge Real  Fundo De

Average diversification

The 3 months correlation between Hedge and Fundo is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hedge Real Estate and Fundo de Investimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundo de Investimento and Hedge Real 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 Real Estate are associated (or correlated) with Fundo De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundo de Investimento has no effect on the direction of Hedge Real i.e., Hedge Real and Fundo De go up and down completely randomly.

Pair Corralation between Hedge Real and Fundo De

Assuming the 90 days trading horizon Hedge Real Estate is expected to generate 0.74 times more return on investment than Fundo De. However, Hedge Real Estate is 1.35 times less risky than Fundo De. It trades about 0.16 of its potential returns per unit of risk. Fundo de Investimento is currently generating about 0.07 per unit of risk. If you would invest  8,041  in Hedge Real Estate on December 31, 2024 and sell it today you would earn a total of  778.00  from holding Hedge Real Estate or generate 9.68% return on investment over 90 days.

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

Hedge Real Estate  vs.  Fundo de Investimento

Hedge Real Estate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hedge Real Estate are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak fundamental indicators, Hedge Real may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Fundo de Investimento

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fundo de Investimento are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, Fundo De is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hedge Real and Fundo De

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

The idea behind Hedge Real Estate and Fundo de Investimento 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.