Correlation Between Kinea Fundo and Kinea II

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

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

Diversification Opportunities for Kinea Fundo and Kinea II

-0.22

Correlation Coefficient

Kinea Fundo  Kinea II

Very good diversification

The 3 months correlation between Kinea and Kinea is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Fundo Fundos and Kinea II Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea II Real and Kinea Fundo 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 Kinea Fundo Fundos are associated (or correlated) with Kinea II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea II Real has no effect on the direction of Kinea Fundo i.e., Kinea Fundo and Kinea II go up and down completely randomly.

Pair Corralation between Kinea Fundo and Kinea II

Assuming the 90 days trading horizon Kinea Fundo Fundos is expected to generate 0.18 times more return on investment than Kinea II. However, Kinea Fundo Fundos is 5.5 times less risky than Kinea II. It trades about 0.14 of its potential returns per unit of risk. Kinea II Real is currently generating about -0.08 per unit of risk. If you would invest  6,945  in Kinea Fundo Fundos on December 29, 2024 and sell it today you would earn a total of  543.00  from holding Kinea Fundo Fundos or generate 7.82% return on investment over 90 days.

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

Kinea Fundo Fundos  vs.  Kinea II Real

Kinea Fundo Fundos

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinea Fundo Fundos are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Kinea Fundo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kinea II Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinea II Real has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Kinea Fundo and Kinea II

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

The idea behind Kinea Fundo Fundos and Kinea II Real 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.