Correlation Between REAL INVESTOR and Kinea Fundo

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

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

Diversification Opportunities for REAL INVESTOR and Kinea Fundo

0.85

Correlation Coefficient

REAL INVESTOR  Kinea Fundo

Very poor diversification

The 3 months correlation between REAL and Kinea is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding REAL INVESTOR FUNDO and Kinea Fundo Fundos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Fundo Fundos and REAL INVESTOR 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 REAL INVESTOR FUNDO are associated (or correlated) with Kinea Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Fundo Fundos has no effect on the direction of REAL INVESTOR i.e., REAL INVESTOR and Kinea Fundo go up and down completely randomly.

Pair Corralation between REAL INVESTOR and Kinea Fundo

Assuming the 90 days trading horizon REAL INVESTOR FUNDO is expected to generate 0.54 times more return on investment than Kinea Fundo. However, REAL INVESTOR FUNDO is 1.84 times less risky than Kinea Fundo. It trades about 0.09 of its potential returns per unit of risk. Kinea Fundo Fundos is currently generating about 0.03 per unit of risk. If you would invest  7,356  in REAL INVESTOR FUNDO on December 4, 2024 and sell it today you would earn a total of  2,399  from holding REAL INVESTOR FUNDO or generate 32.61% return on investment over 90 days.

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

REAL INVESTOR FUNDO  vs.  Kinea Fundo Fundos

REAL INVESTOR FUNDO

Risk-Adjusted Performance

Very Weak

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

Kinea Fundo Fundos

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kinea Fundo Fundos are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Kinea Fundo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with REAL INVESTOR and Kinea Fundo

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

The idea behind REAL INVESTOR FUNDO and Kinea Fundo Fundos 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.