Correlation Between Ourinvest Jpp and Kinea II

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

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

Diversification Opportunities for Ourinvest Jpp and Kinea II

0.21

Correlation Coefficient

Ourinvest Jpp  Kinea II

Modest diversification

The 3 months correlation between Ourinvest and Kinea is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ourinvest Jpp Fundo and Kinea II Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea II Real and Ourinvest Jpp 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 Ourinvest Jpp Fundo are associated (or correlated) with Kinea II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea II Real has no effect on the direction of Ourinvest Jpp i.e., Ourinvest Jpp and Kinea II go up and down completely randomly.

Pair Corralation between Ourinvest Jpp and Kinea II

Assuming the 90 days trading horizon Ourinvest Jpp Fundo is expected to generate 0.12 times more return on investment than Kinea II. However, Ourinvest Jpp Fundo is 8.28 times less risky than Kinea II. It trades about -0.14 of its potential returns per unit of risk. Kinea II Real is currently generating about -0.11 per unit of risk. If you would invest  7,712  in Ourinvest Jpp Fundo on September 15, 2024 and sell it today you would lose (609.00) from holding Ourinvest Jpp Fundo or give up 7.9% of portfolio value over 90 days.

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

Ourinvest Jpp Fundo  vs.  Kinea II Real

Ourinvest Jpp Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kinea II Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinea II Real has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic 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 Ourinvest Jpp and Kinea II

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

The idea behind Ourinvest Jpp Fundo and Kinea II Real 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.