Correlation Between LESTE FDO and WEG SA
Can any of the company-specific risk be diversified away by investing in both LESTE FDO and WEG SA 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 LESTE FDO and WEG SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LESTE FDO INV and WEG SA, you can compare the effects of market volatilities on LESTE FDO and WEG SA 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 LESTE FDO with a short position of WEG SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LESTE FDO and WEG SA.
Diversification Opportunities for LESTE FDO and WEG SA
Pay attention - limited upside
The 3 months correlation between LESTE and WEG is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding LESTE FDO INV and WEG SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEG SA and LESTE FDO 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 LESTE FDO INV are associated (or correlated) with WEG SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEG SA has no effect on the direction of LESTE FDO i.e., LESTE FDO and WEG SA go up and down completely randomly.
Pair Corralation between LESTE FDO and WEG SA
Assuming the 90 days trading horizon LESTE FDO INV is expected to generate 0.62 times more return on investment than WEG SA. However, LESTE FDO INV is 1.6 times less risky than WEG SA. It trades about 0.18 of its potential returns per unit of risk. WEG SA is currently generating about -0.1 per unit of risk. If you would invest 6,601 in LESTE FDO INV on December 29, 2024 and sell it today you would earn a total of 978.00 from holding LESTE FDO INV or generate 14.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.39% |
Values | Daily Returns |
LESTE FDO INV vs. WEG SA
Performance |
Timeline |
LESTE FDO INV |
WEG SA |
LESTE FDO and WEG SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LESTE FDO and WEG SA
The main advantage of trading using opposite LESTE FDO and WEG SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LESTE FDO position performs unexpectedly, WEG SA 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 WEG SA will offset losses from the drop in WEG SA's long position.LESTE FDO vs. FDO INV IMOB | LESTE FDO vs. SUPREMO FUNDO DE | LESTE FDO vs. Real Estate Investment | LESTE FDO vs. NAVI CRDITO IMOBILIRIO |
Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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