Correlation Between Kinea Renda and Kinea Indices

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

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

Diversification Opportunities for Kinea Renda and Kinea Indices

0.75

Correlation Coefficient

Kinea Renda  Kinea Indices

Poor diversification

The 3 months correlation between Kinea and Kinea is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Renda Imobiliria and Kinea Indices Precos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Indices Precos and Kinea Renda 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 Renda Imobiliria are associated (or correlated) with Kinea Indices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Indices Precos has no effect on the direction of Kinea Renda i.e., Kinea Renda and Kinea Indices go up and down completely randomly.

Pair Corralation between Kinea Renda and Kinea Indices

Assuming the 90 days trading horizon Kinea Renda is expected to generate 4.59 times less return on investment than Kinea Indices. In addition to that, Kinea Renda is 1.4 times more volatile than Kinea Indices Precos. It trades about 0.01 of its total potential returns per unit of risk. Kinea Indices Precos is currently generating about 0.06 per unit of volatility. If you would invest  8,838  in Kinea Indices Precos on December 30, 2024 and sell it today you would earn a total of  255.00  from holding Kinea Indices Precos or generate 2.89% return on investment over 90 days.

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

Kinea Renda Imobiliria  vs.  Kinea Indices Precos

Kinea Renda Imobiliria

Risk-Adjusted Performance

Very Weak

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

Kinea Indices Precos

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinea Indices Precos are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong forward indicators, Kinea Indices is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kinea Renda and Kinea Indices

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

The idea behind Kinea Renda Imobiliria and Kinea Indices Precos 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.