Correlation Between Kinea Hedge and Imob I

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

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

Diversification Opportunities for Kinea Hedge and Imob I

0.94

Correlation Coefficient

Kinea Hedge  Imob I

Almost no diversification

The 3 months correlation between Kinea and Imob is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Hedge Fund and Imob I Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imob I Fundo and Kinea Hedge 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 Hedge Fund are associated (or correlated) with Imob I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imob I Fundo has no effect on the direction of Kinea Hedge i.e., Kinea Hedge and Imob I go up and down completely randomly.

Pair Corralation between Kinea Hedge and Imob I

Assuming the 90 days trading horizon Kinea Hedge Fund is expected to under-perform the Imob I. But the fund apears to be less risky and, when comparing its historical volatility, Kinea Hedge Fund is 2.77 times less risky than Imob I. The fund trades about -0.53 of its potential returns per unit of risk. The Imob I Fundo is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  7,475  in Imob I Fundo on September 14, 2024 and sell it today you would lose (82.00) from holding Imob I Fundo or give up 1.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	45.0%
Values	Daily Returns

Kinea Hedge Fund  vs.  Imob I Fundo

Kinea Hedge Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinea Hedge Fund has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's technical 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.

Imob I Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imob I Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's fundamental 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 Kinea Hedge and Imob I

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

The idea behind Kinea Hedge Fund and Imob I 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.