Correlation Between Jbfo Fof and TRX Renda

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

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

Diversification Opportunities for Jbfo Fof and TRX Renda

-0.49

Correlation Coefficient

Jbfo Fof  TRX Renda

Very good diversification

The 3 months correlation between Jbfo and TRX is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jbfo Fof Fundo and TRX Renda Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRX Renda Fundo and Jbfo Fof 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 Jbfo Fof Fundo are associated (or correlated) with TRX Renda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRX Renda Fundo has no effect on the direction of Jbfo Fof i.e., Jbfo Fof and TRX Renda go up and down completely randomly.

Pair Corralation between Jbfo Fof and TRX Renda

Assuming the 90 days trading horizon Jbfo Fof Fundo is expected to generate 2.26 times more return on investment than TRX Renda. However, Jbfo Fof is 2.26 times more volatile than TRX Renda Fundo. It trades about 0.22 of its potential returns per unit of risk. TRX Renda Fundo is currently generating about -0.13 per unit of risk. If you would invest  7,028  in Jbfo Fof Fundo on September 21, 2024 and sell it today you would earn a total of  1,173  from holding Jbfo Fof Fundo or generate 16.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Jbfo Fof Fundo  vs.  TRX Renda Fundo

Jbfo Fof Fundo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jbfo Fof Fundo are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak technical and fundamental indicators, Jbfo Fof sustained solid returns over the last few months and may actually be approaching a breakup point.

TRX Renda Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jbfo Fof and TRX Renda

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

The idea behind Jbfo Fof Fundo and TRX Renda 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.