Correlation Between WHG FINVEST and NAVI CRDITO

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

By analyzing existing cross correlation between WHG FINVEST SP and NAVI CRDITO IMOBILIRIO, you can compare the effects of market volatilities on WHG FINVEST and NAVI CRDITO 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 WHG FINVEST with a short position of NAVI CRDITO. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHG FINVEST and NAVI CRDITO.

Diversification Opportunities for WHG FINVEST and NAVI CRDITO

-0.79

Correlation Coefficient

WHG FINVEST  NAVI CRDITO

Pay attention - limited upside

The 3 months correlation between WHG and NAVI is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding WHG FINVEST SP and NAVI CRDITO IMOBILIRIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAVI CRDITO IMOBILIRIO and WHG FINVEST 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 WHG FINVEST SP are associated (or correlated) with NAVI CRDITO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAVI CRDITO IMOBILIRIO has no effect on the direction of WHG FINVEST i.e., WHG FINVEST and NAVI CRDITO go up and down completely randomly.

Pair Corralation between WHG FINVEST and NAVI CRDITO

Assuming the 90 days trading horizon WHG FINVEST is expected to generate 6.36 times less return on investment than NAVI CRDITO. But when comparing it to its historical volatility, WHG FINVEST SP is 74.84 times less risky than NAVI CRDITO. It trades about 0.23 of its potential returns per unit of risk. NAVI CRDITO IMOBILIRIO is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  808.00  in NAVI CRDITO IMOBILIRIO on October 10, 2024 and sell it today you would earn a total of  3.00  from holding NAVI CRDITO IMOBILIRIO or generate 0.37% return on investment over 90 days.

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

WHG FINVEST SP  vs.  NAVI CRDITO IMOBILIRIO

WHG FINVEST SP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WHG FINVEST SP are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak fundamental indicators, WHG FINVEST may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NAVI CRDITO IMOBILIRIO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAVI CRDITO IMOBILIRIO 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 WHG FINVEST and NAVI CRDITO

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

The idea behind WHG FINVEST SP and NAVI CRDITO IMOBILIRIO 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.