Correlation Between Aesapar Fundo and Fundos De

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

Diversification Opportunities for Aesapar Fundo and Fundos De

0.19

Correlation Coefficient

Aesapar Fundo  Fundos De

Average diversification

The 3 months correlation between Aesapar and Fundos is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aesapar Fundo de and Fundos de Investimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundos de Investimento 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 Fundos De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundos de Investimento has no effect on the direction of Aesapar Fundo i.e., Aesapar Fundo and Fundos De go up and down completely randomly.

Pair Corralation between Aesapar Fundo and Fundos De

Assuming the 90 days trading horizon Aesapar Fundo de is expected to generate 0.19 times more return on investment than Fundos De. However, Aesapar Fundo de is 5.19 times less risky than Fundos De. It trades about -0.02 of its potential returns per unit of risk. Fundos de Investimento is currently generating about -0.02 per unit of risk. If you would invest  9,503  in Aesapar Fundo de on December 25, 2024 and sell it today you would lose (100.00) from holding Aesapar Fundo de or give up 1.05% of portfolio value over 90 days.

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

Aesapar Fundo de  vs.  Fundos de Investimento

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.

Fundos de Investimento

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aesapar Fundo and Fundos De

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

The idea behind Aesapar Fundo de and Fundos de Investimento 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.