Correlation Between Plano Plano and CXFI Caixa

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

By analyzing existing cross correlation between Plano Plano Desenvolvimento and CXFI Caixa, you can compare the effects of market volatilities on Plano Plano and CXFI Caixa 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 Plano Plano with a short position of CXFI Caixa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plano Plano and CXFI Caixa.

Diversification Opportunities for Plano Plano and CXFI Caixa

-0.26

Correlation Coefficient

Plano Plano  CXFI Caixa

Very good diversification

The 3 months correlation between Plano and CXFI is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Plano Plano Desenvolvimento and CXFI Caixa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CXFI Caixa and Plano Plano 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 Plano Plano Desenvolvimento are associated (or correlated) with CXFI Caixa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CXFI Caixa has no effect on the direction of Plano Plano i.e., Plano Plano and CXFI Caixa go up and down completely randomly.

Pair Corralation between Plano Plano and CXFI Caixa

Assuming the 90 days trading horizon Plano Plano Desenvolvimento is expected to generate 0.77 times more return on investment than CXFI Caixa. However, Plano Plano Desenvolvimento is 1.3 times less risky than CXFI Caixa. It trades about -0.03 of its potential returns per unit of risk. CXFI Caixa is currently generating about -0.03 per unit of risk. If you would invest  1,207  in Plano Plano Desenvolvimento on September 12, 2024 and sell it today you would lose (69.00) from holding Plano Plano Desenvolvimento or give up 5.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Plano Plano Desenvolvimento  vs.  CXFI Caixa

Plano Plano Desenvol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plano Plano Desenvolvimento has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Plano Plano is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

CXFI Caixa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CXFI Caixa 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.

Pair Trading with Plano Plano and CXFI Caixa

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

The idea behind Plano Plano Desenvolvimento and CXFI Caixa 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.