Correlation Between NAVI CRDITO and CSHG Renda

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

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

Diversification Opportunities for NAVI CRDITO and CSHG Renda

0.46

Correlation Coefficient

NAVI CRDITO  CSHG Renda

Very weak diversification

The 3 months correlation between NAVI and CSHG is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding NAVI CRDITO IMOBILIRIO and CSHG Renda Urbana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSHG Renda Urbana and NAVI CRDITO 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 NAVI CRDITO IMOBILIRIO are associated (or correlated) with CSHG Renda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSHG Renda Urbana has no effect on the direction of NAVI CRDITO i.e., NAVI CRDITO and CSHG Renda go up and down completely randomly.

Pair Corralation between NAVI CRDITO and CSHG Renda

Assuming the 90 days trading horizon NAVI CRDITO IMOBILIRIO is expected to generate 3.19 times more return on investment than CSHG Renda. However, NAVI CRDITO is 3.19 times more volatile than CSHG Renda Urbana. It trades about 0.01 of its potential returns per unit of risk. CSHG Renda Urbana is currently generating about -0.01 per unit of risk. If you would invest  783.00  in NAVI CRDITO IMOBILIRIO on October 24, 2024 and sell it today you would lose (2.00) from holding NAVI CRDITO IMOBILIRIO or give up 0.26% of portfolio value over 90 days.

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

NAVI CRDITO IMOBILIRIO  vs.  CSHG Renda Urbana

NAVI CRDITO IMOBILIRIO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAVI CRDITO IMOBILIRIO has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

CSHG Renda Urbana

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind NAVI CRDITO IMOBILIRIO and CSHG Renda Urbana 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.