Correlation Between Loft II and Luggo Fundo

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

By analyzing existing cross correlation between Loft II Fundo and Luggo Fundo De, you can compare the effects of market volatilities on Loft II and Luggo Fundo 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 Loft II with a short position of Luggo Fundo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loft II and Luggo Fundo.

Diversification Opportunities for Loft II and Luggo Fundo

0.0

Correlation Coefficient

Loft II  Luggo Fundo

Pay attention - limited upside

The 3 months correlation between Loft and Luggo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Loft II Fundo and Luggo Fundo De in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luggo Fundo De and Loft II 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 Loft II Fundo are associated (or correlated) with Luggo Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luggo Fundo De has no effect on the direction of Loft II i.e., Loft II and Luggo Fundo go up and down completely randomly.

Pair Corralation between Loft II and Luggo Fundo

If you would invest  810.00  in Loft II Fundo on December 21, 2024 and sell it today you would lose (95.00) from holding Loft II Fundo or give up 11.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Loft II Fundo  vs.  Luggo Fundo De

Loft II Fundo

Risk-Adjusted Performance

Very Weak

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

Luggo Fundo De

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Loft II and Luggo Fundo

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

The idea behind Loft II Fundo and Luggo Fundo De 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.