Correlation Between Aesapar Fundo and Alphaville

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

By analyzing existing cross correlation between Aesapar Fundo de and Alphaville SA, you can compare the effects of market volatilities on Aesapar Fundo and Alphaville 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 Aesapar Fundo with a short position of Alphaville. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aesapar Fundo and Alphaville.

Diversification Opportunities for Aesapar Fundo and Alphaville

0.76

Correlation Coefficient

Aesapar Fundo  Alphaville

Poor diversification

The 3 months correlation between Aesapar and Alphaville is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aesapar Fundo de and Alphaville SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphaville SA and Aesapar Fundo 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 Aesapar Fundo de are associated (or correlated) with Alphaville. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphaville SA has no effect on the direction of Aesapar Fundo i.e., Aesapar Fundo and Alphaville go up and down completely randomly.

Pair Corralation between Aesapar Fundo and Alphaville

Assuming the 90 days trading horizon Aesapar Fundo de is expected to generate 0.75 times more return on investment than Alphaville. However, Aesapar Fundo de is 1.32 times less risky than Alphaville. It trades about -0.22 of its potential returns per unit of risk. Alphaville SA is currently generating about -0.18 per unit of risk. If you would invest  12,503  in Aesapar Fundo de on September 12, 2024 and sell it today you would lose (2,863) from holding Aesapar Fundo de or give up 22.9% of portfolio value over 90 days.

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

Aesapar Fundo de  vs.  Alphaville SA

Aesapar Fundo de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aesapar Fundo de 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.

Alphaville SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alphaville SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Aesapar Fundo and Alphaville

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

The idea behind Aesapar Fundo de and Alphaville SA 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.