Correlation Between Gen Digital and Mxima Renda

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

By analyzing existing cross correlation between Gen Digital and Mxima Renda Corporativa, you can compare the effects of market volatilities on Gen Digital and Mxima Renda 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 Gen Digital with a short position of Mxima Renda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gen Digital and Mxima Renda.

Diversification Opportunities for Gen Digital and Mxima Renda

-0.43

Correlation Coefficient

Gen Digital  Mxima Renda

Very good diversification

The 3 months correlation between Gen and Mxima is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gen Digital and Mxima Renda Corporativa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mxima Renda Corporativa and Gen Digital 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 Gen Digital are associated (or correlated) with Mxima Renda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mxima Renda Corporativa has no effect on the direction of Gen Digital i.e., Gen Digital and Mxima Renda go up and down completely randomly.

Pair Corralation between Gen Digital and Mxima Renda

Assuming the 90 days trading horizon Gen Digital is expected to generate 8.6 times less return on investment than Mxima Renda. But when comparing it to its historical volatility, Gen Digital is 36.44 times less risky than Mxima Renda. It trades about 0.24 of its potential returns per unit of risk. Mxima Renda Corporativa is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  131.00  in Mxima Renda Corporativa on October 5, 2024 and sell it today you would earn a total of  4.00  from holding Mxima Renda Corporativa or generate 3.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Gen Digital  vs.  Mxima Renda Corporativa

Gen Digital

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gen Digital are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Gen Digital sustained solid returns over the last few months and may actually be approaching a breakup point.

Mxima Renda Corporativa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mxima Renda Corporativa has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Gen Digital and Mxima Renda

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

The idea behind Gen Digital and Mxima Renda Corporativa 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.