Correlation Between Kinea Oportunidades and NAVI CRDITO

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

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

Diversification Opportunities for Kinea Oportunidades and NAVI CRDITO

0.39

Correlation Coefficient

Kinea Oportunidades  NAVI CRDITO

Weak diversification

The 3 months correlation between Kinea and NAVI is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Oportunidades Real and NAVI CRDITO IMOBILIRIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAVI CRDITO IMOBILIRIO and Kinea Oportunidades 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 Oportunidades Real are associated (or correlated) with NAVI CRDITO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAVI CRDITO IMOBILIRIO has no effect on the direction of Kinea Oportunidades i.e., Kinea Oportunidades and NAVI CRDITO go up and down completely randomly.

Pair Corralation between Kinea Oportunidades and NAVI CRDITO

Assuming the 90 days trading horizon Kinea Oportunidades Real is expected to under-perform the NAVI CRDITO. But the fund apears to be less risky and, when comparing its historical volatility, Kinea Oportunidades Real is 1.75 times less risky than NAVI CRDITO. The fund trades about -0.04 of its potential returns per unit of risk. The NAVI CRDITO IMOBILIRIO is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  826.00  in NAVI CRDITO IMOBILIRIO on November 28, 2024 and sell it today you would lose (7.00) from holding NAVI CRDITO IMOBILIRIO or give up 0.85% of portfolio value over 90 days.

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

Kinea Oportunidades Real  vs.  NAVI CRDITO IMOBILIRIO

Kinea Oportunidades Real

Risk-Adjusted Performance

Very Weak

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

NAVI CRDITO IMOBILIRIO

Risk-Adjusted Performance

Very Weak

Over the last 90 days NAVI CRDITO IMOBILIRIO has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, NAVI CRDITO 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 Oportunidades and NAVI CRDITO

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

The idea behind Kinea Oportunidades Real and NAVI CRDITO IMOBILIRIO 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.