Correlation Between Kinea Oportunidades and WHG FINVEST

Can any of the company-specific risk be diversified away by investing in both Kinea Oportunidades and WHG FINVEST 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 WHG FINVEST 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 WHG FINVEST SP, you can compare the effects of market volatilities on Kinea Oportunidades and WHG FINVEST 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 WHG FINVEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinea Oportunidades and WHG FINVEST.

Diversification Opportunities for Kinea Oportunidades and WHG FINVEST

-0.87

Correlation Coefficient

Kinea Oportunidades  WHG FINVEST

Pay attention - limited upside

The 3 months correlation between Kinea and WHG is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Oportunidades Real and WHG FINVEST SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHG FINVEST SP 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 WHG FINVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHG FINVEST SP has no effect on the direction of Kinea Oportunidades i.e., Kinea Oportunidades and WHG FINVEST go up and down completely randomly.

Pair Corralation between Kinea Oportunidades and WHG FINVEST

Assuming the 90 days trading horizon Kinea Oportunidades Real is expected to generate 56.61 times more return on investment than WHG FINVEST. However, Kinea Oportunidades is 56.61 times more volatile than WHG FINVEST SP. It trades about 0.2 of its potential returns per unit of risk. WHG FINVEST SP is currently generating about 0.23 per unit of risk. If you would invest  7,497  in Kinea Oportunidades Real on October 10, 2024 and sell it today you would earn a total of  528.00  from holding Kinea Oportunidades Real or generate 7.04% return on investment over 90 days.

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

Kinea Oportunidades Real  vs.  WHG FINVEST SP

Kinea Oportunidades Real

Risk-Adjusted Performance

0 of 100

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.

WHG FINVEST SP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WHG FINVEST SP are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak fundamental indicators, WHG FINVEST may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Kinea Oportunidades and WHG FINVEST

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

The idea behind Kinea Oportunidades Real and WHG FINVEST SP 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.