Correlation Between BS2 ALLINVESTMENTS and TRX Renda

Can any of the company-specific risk be diversified away by investing in both BS2 ALLINVESTMENTS and TRX Renda 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 BS2 ALLINVESTMENTS and TRX Renda into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BS2 ALLINVESTMENTS FDO and TRX Renda Fundo, you can compare the effects of market volatilities on BS2 ALLINVESTMENTS and TRX Renda 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 BS2 ALLINVESTMENTS with a short position of TRX Renda. Check out your portfolio center. Please also check ongoing floating volatility patterns of BS2 ALLINVESTMENTS and TRX Renda.

Diversification Opportunities for BS2 ALLINVESTMENTS and TRX Renda

-0.53

Correlation Coefficient

BS2 ALLINVESTMENTS  TRX Renda

Excellent diversification

The 3 months correlation between BS2 and TRX is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BS2 ALLINVESTMENTS FDO and TRX Renda Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRX Renda Fundo and BS2 ALLINVESTMENTS 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 BS2 ALLINVESTMENTS FDO are associated (or correlated) with TRX Renda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRX Renda Fundo has no effect on the direction of BS2 ALLINVESTMENTS i.e., BS2 ALLINVESTMENTS and TRX Renda go up and down completely randomly.

Pair Corralation between BS2 ALLINVESTMENTS and TRX Renda

Assuming the 90 days trading horizon BS2 ALLINVESTMENTS FDO is expected to generate 0.2 times more return on investment than TRX Renda. However, BS2 ALLINVESTMENTS FDO is 4.97 times less risky than TRX Renda. It trades about 0.13 of its potential returns per unit of risk. TRX Renda Fundo is currently generating about -0.02 per unit of risk. If you would invest  7,598  in BS2 ALLINVESTMENTS FDO on September 30, 2024 and sell it today you would earn a total of  139.00  from holding BS2 ALLINVESTMENTS FDO or generate 1.83% return on investment over 90 days.

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

BS2 ALLINVESTMENTS FDO  vs.  TRX Renda Fundo

BS2 ALLINVESTMENTS FDO

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BS2 ALLINVESTMENTS FDO are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, BS2 ALLINVESTMENTS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TRX Renda Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BS2 ALLINVESTMENTS and TRX Renda

The main advantage of trading using opposite BS2 ALLINVESTMENTS and TRX Renda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BS2 ALLINVESTMENTS position performs unexpectedly, TRX Renda 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 TRX Renda will offset losses from the drop in TRX Renda's long position.

The idea behind BS2 ALLINVESTMENTS FDO and TRX Renda 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.