Correlation Between Aesapar Fundo and CF3 FUNDO

Can any of the company-specific risk be diversified away by investing in both Aesapar Fundo and CF3 FUNDO 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 CF3 FUNDO 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 CF3 FUNDO DE, you can compare the effects of market volatilities on Aesapar Fundo and CF3 FUNDO 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 CF3 FUNDO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aesapar Fundo and CF3 FUNDO.

Diversification Opportunities for Aesapar Fundo and CF3 FUNDO

-0.37

Correlation Coefficient

Aesapar Fundo  CF3 FUNDO

Very good diversification

The 3 months correlation between Aesapar and CF3 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aesapar Fundo de and CF3 FUNDO DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF3 FUNDO DE 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 CF3 FUNDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF3 FUNDO DE has no effect on the direction of Aesapar Fundo i.e., Aesapar Fundo and CF3 FUNDO go up and down completely randomly.

Pair Corralation between Aesapar Fundo and CF3 FUNDO

Assuming the 90 days trading horizon Aesapar Fundo de is expected to under-perform the CF3 FUNDO. But the fund apears to be less risky and, when comparing its historical volatility, Aesapar Fundo de is 1.5 times less risky than CF3 FUNDO. The fund trades about -0.08 of its potential returns per unit of risk. The CF3 FUNDO DE is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  91,187  in CF3 FUNDO DE on December 29, 2024 and sell it today you would earn a total of  8,813  from holding CF3 FUNDO DE or generate 9.66% return on investment over 90 days.

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

Aesapar Fundo de  vs.  CF3 FUNDO DE

Aesapar Fundo de

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aesapar Fundo de has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, Aesapar Fundo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CF3 FUNDO DE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CF3 FUNDO DE are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak forward indicators, CF3 FUNDO may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aesapar Fundo and CF3 FUNDO

The main advantage of trading using opposite Aesapar Fundo and CF3 FUNDO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aesapar Fundo position performs unexpectedly, CF3 FUNDO 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 CF3 FUNDO will offset losses from the drop in CF3 FUNDO's long position.

The idea behind Aesapar Fundo de and CF3 FUNDO DE 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.