Correlation Between Hsi Ativos and LIFE CAPITAL

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

By analyzing existing cross correlation between Hsi Ativos Financeiros and LIFE CAPITAL PARTNERS, you can compare the effects of market volatilities on Hsi Ativos 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 Hsi Ativos with a short position of LIFE CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsi Ativos and LIFE CAPITAL.

Diversification Opportunities for Hsi Ativos and LIFE CAPITAL

0.87

Correlation Coefficient

Hsi Ativos  LIFE CAPITAL

Very poor diversification

The 3 months correlation between Hsi and LIFE is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hsi Ativos Financeiros 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 Hsi Ativos 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 Hsi Ativos Financeiros 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 Hsi Ativos i.e., Hsi Ativos and LIFE CAPITAL go up and down completely randomly.

Pair Corralation between Hsi Ativos and LIFE CAPITAL

Assuming the 90 days trading horizon Hsi Ativos Financeiros is expected to under-perform the LIFE CAPITAL. But the fund apears to be less risky and, when comparing its historical volatility, Hsi Ativos Financeiros is 1.19 times less risky than LIFE CAPITAL. The fund trades about -0.01 of its potential returns per unit of risk. The LIFE CAPITAL PARTNERS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  880.00  in LIFE CAPITAL PARTNERS on October 12, 2024 and sell it today you would earn a total of  82.00  from holding LIFE CAPITAL PARTNERS or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.47%
Values	Daily Returns

Hsi Ativos Financeiros  vs.  LIFE CAPITAL PARTNERS

Hsi Ativos Financeiros

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hsi Ativos Financeiros are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Hsi Ativos is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

LIFE CAPITAL PARTNERS

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LIFE CAPITAL PARTNERS are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, LIFE CAPITAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hsi Ativos and LIFE CAPITAL

The main advantage of trading using opposite Hsi Ativos and LIFE CAPITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsi Ativos 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.

The idea behind Hsi Ativos Financeiros and LIFE CAPITAL PARTNERS 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.