Correlation Between Kinea Rendimentos and Oi SA

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

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

Diversification Opportunities for Kinea Rendimentos and Oi SA

0.42

Correlation Coefficient

Kinea Rendimentos  Oi SA

Very weak diversification

The 3 months correlation between Kinea and OIBR3 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Rendimentos Imobilirios and Oi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oi SA and Kinea Rendimentos 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 Rendimentos Imobilirios are associated (or correlated) with Oi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oi SA has no effect on the direction of Kinea Rendimentos i.e., Kinea Rendimentos and Oi SA go up and down completely randomly.

Pair Corralation between Kinea Rendimentos and Oi SA

Assuming the 90 days trading horizon Kinea Rendimentos Imobilirios is expected to generate 0.06 times more return on investment than Oi SA. However, Kinea Rendimentos Imobilirios is 17.62 times less risky than Oi SA. It trades about -0.06 of its potential returns per unit of risk. Oi SA is currently generating about -0.07 per unit of risk. If you would invest  10,210  in Kinea Rendimentos Imobilirios on September 12, 2024 and sell it today you would lose (316.00) from holding Kinea Rendimentos Imobilirios or give up 3.1% of portfolio value over 90 days.

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

Kinea Rendimentos Imobilirios  vs.  Oi SA

Kinea Rendimentos

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oi SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oi SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kinea Rendimentos and Oi SA

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

The idea behind Kinea Rendimentos Imobilirios and Oi SA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.