Correlation Between KILIMA VOLKANO and SPARTA FIAGRO

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

By analyzing existing cross correlation between KILIMA VOLKANO RECEBVEIS and SPARTA FIAGRO FDO, you can compare the effects of market volatilities on KILIMA VOLKANO and SPARTA FIAGRO 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 KILIMA VOLKANO with a short position of SPARTA FIAGRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of KILIMA VOLKANO and SPARTA FIAGRO.

Diversification Opportunities for KILIMA VOLKANO and SPARTA FIAGRO

0.89

Correlation Coefficient

KILIMA VOLKANO  SPARTA FIAGRO

Very poor diversification

The 3 months correlation between KILIMA and SPARTA is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding KILIMA VOLKANO RECEBVEIS and SPARTA FIAGRO FDO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTA FIAGRO FDO and KILIMA VOLKANO 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 KILIMA VOLKANO RECEBVEIS are associated (or correlated) with SPARTA FIAGRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTA FIAGRO FDO has no effect on the direction of KILIMA VOLKANO i.e., KILIMA VOLKANO and SPARTA FIAGRO go up and down completely randomly.

Pair Corralation between KILIMA VOLKANO and SPARTA FIAGRO

Assuming the 90 days trading horizon KILIMA VOLKANO RECEBVEIS is expected to under-perform the SPARTA FIAGRO. In addition to that, KILIMA VOLKANO is 1.92 times more volatile than SPARTA FIAGRO FDO. It trades about -0.22 of its total potential returns per unit of risk. SPARTA FIAGRO FDO is currently generating about -0.22 per unit of volatility. If you would invest  10,039  in SPARTA FIAGRO FDO on September 15, 2024 and sell it today you would lose (1,439) from holding SPARTA FIAGRO FDO or give up 14.33% of portfolio value over 90 days.

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

KILIMA VOLKANO RECEBVEIS  vs.  SPARTA FIAGRO FDO

KILIMA VOLKANO RECEBVEIS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KILIMA VOLKANO RECEBVEIS 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 January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

SPARTA FIAGRO FDO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPARTA FIAGRO FDO 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 January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with KILIMA VOLKANO and SPARTA FIAGRO

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

The idea behind KILIMA VOLKANO RECEBVEIS and SPARTA FIAGRO FDO 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 Commodity Directory module to find actively traded commodities issued by global exchanges.