Correlation Between NAVI CRDITO and HEDGE OFFICE

Can any of the company-specific risk be diversified away by investing in both NAVI CRDITO and HEDGE OFFICE 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 HEDGE OFFICE 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 HEDGE OFFICE INCOME, you can compare the effects of market volatilities on NAVI CRDITO and HEDGE OFFICE 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 HEDGE OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAVI CRDITO and HEDGE OFFICE.

Diversification Opportunities for NAVI CRDITO and HEDGE OFFICE

0.69

Correlation Coefficient

NAVI CRDITO  HEDGE OFFICE

Poor diversification

The 3 months correlation between NAVI and HEDGE is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding NAVI CRDITO IMOBILIRIO and HEDGE OFFICE INCOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEDGE OFFICE INCOME 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 HEDGE OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEDGE OFFICE INCOME has no effect on the direction of NAVI CRDITO i.e., NAVI CRDITO and HEDGE OFFICE go up and down completely randomly.

Pair Corralation between NAVI CRDITO and HEDGE OFFICE

Assuming the 90 days trading horizon NAVI CRDITO IMOBILIRIO is expected to under-perform the HEDGE OFFICE. But the fund apears to be less risky and, when comparing its historical volatility, NAVI CRDITO IMOBILIRIO is 1.63 times less risky than HEDGE OFFICE. The fund trades about -0.28 of its potential returns per unit of risk. The HEDGE OFFICE INCOME is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  2,459  in HEDGE OFFICE INCOME on September 15, 2024 and sell it today you would lose (258.00) from holding HEDGE OFFICE INCOME or give up 10.49% of portfolio value over 90 days.

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

NAVI CRDITO IMOBILIRIO  vs.  HEDGE OFFICE INCOME

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.

HEDGE OFFICE INCOME

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEDGE OFFICE INCOME has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with NAVI CRDITO and HEDGE OFFICE

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

The idea behind NAVI CRDITO IMOBILIRIO and HEDGE OFFICE INCOME 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.