Correlation Between REAL INVESTOR and FUNDO DE

Can any of the company-specific risk be diversified away by investing in both REAL INVESTOR and FUNDO 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 REAL INVESTOR and FUNDO DE 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 FUNDO DE INVESTIMENTO, you can compare the effects of market volatilities on REAL INVESTOR and FUNDO 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 REAL INVESTOR with a short position of FUNDO DE. Check out your portfolio center. Please also check ongoing floating volatility patterns of REAL INVESTOR and FUNDO DE.

Diversification Opportunities for REAL INVESTOR and FUNDO DE

0.71

Correlation Coefficient

REAL INVESTOR  FUNDO DE

Poor diversification

The 3 months correlation between REAL and FUNDO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding REAL INVESTOR FUNDO and FUNDO DE INVESTIMENTO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUNDO DE INVESTIMENTO 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 FUNDO DE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUNDO DE INVESTIMENTO has no effect on the direction of REAL INVESTOR i.e., REAL INVESTOR and FUNDO DE go up and down completely randomly.

Pair Corralation between REAL INVESTOR and FUNDO DE

Assuming the 90 days trading horizon REAL INVESTOR FUNDO is expected to generate 0.58 times more return on investment than FUNDO DE. However, REAL INVESTOR FUNDO is 1.72 times less risky than FUNDO DE. It trades about 0.21 of its potential returns per unit of risk. FUNDO DE INVESTIMENTO is currently generating about -0.03 per unit of risk. If you would invest  9,470  in REAL INVESTOR FUNDO on December 30, 2024 and sell it today you would earn a total of  869.00  from holding REAL INVESTOR FUNDO or generate 9.18% return on investment over 90 days.

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

REAL INVESTOR FUNDO  vs.  FUNDO DE INVESTIMENTO

REAL INVESTOR FUNDO

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in REAL INVESTOR FUNDO are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, REAL INVESTOR may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FUNDO DE INVESTIMENTO

Risk-Adjusted Performance

Very Weak

Over the last 90 days FUNDO DE INVESTIMENTO has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, FUNDO 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 REAL INVESTOR and FUNDO DE

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

The idea behind REAL INVESTOR FUNDO and FUNDO 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.