Correlation Between S1YM34 and Fundo Investec

Can any of the company-specific risk be diversified away by investing in both S1YM34 and Fundo Investec 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 S1YM34 and Fundo Investec into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between S1YM34 and Fundo Investec IMB, you can compare the effects of market volatilities on S1YM34 and Fundo Investec 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 S1YM34 with a short position of Fundo Investec. Check out your portfolio center. Please also check ongoing floating volatility patterns of S1YM34 and Fundo Investec.

Diversification Opportunities for S1YM34 and Fundo Investec

-0.68

Correlation Coefficient

S1YM34  Fundo Investec

Excellent diversification

The 3 months correlation between S1YM34 and Fundo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding S1YM34 and Fundo Investec IMB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundo Investec IMB and S1YM34 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 S1YM34 are associated (or correlated) with Fundo Investec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundo Investec IMB has no effect on the direction of S1YM34 i.e., S1YM34 and Fundo Investec go up and down completely randomly.

Pair Corralation between S1YM34 and Fundo Investec

Assuming the 90 days trading horizon S1YM34 is expected to generate 0.05 times more return on investment than Fundo Investec. However, S1YM34 is 20.63 times less risky than Fundo Investec. It trades about 0.22 of its potential returns per unit of risk. Fundo Investec IMB is currently generating about -0.11 per unit of risk. If you would invest  17,800  in S1YM34 on September 24, 2024 and sell it today you would earn a total of  93.00  from holding S1YM34 or generate 0.52% return on investment over 90 days.

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

S1YM34  vs.  Fundo Investec IMB

S1YM34

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in S1YM34 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, S1YM34 sustained solid returns over the last few months and may actually be approaching a breakup point.

Fundo Investec IMB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundo Investec IMB has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's essential 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 S1YM34 and Fundo Investec

The main advantage of trading using opposite S1YM34 and Fundo Investec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S1YM34 position performs unexpectedly, Fundo Investec 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 Investec will offset losses from the drop in Fundo Investec's long position.

The idea behind S1YM34 and Fundo Investec IMB 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.