Correlation Between SUPREMO FUNDO and ASSET BANK

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

By analyzing existing cross correlation between SUPREMO FUNDO DE and ASSET BANK AGRONEGCIOS, you can compare the effects of market volatilities on SUPREMO FUNDO and ASSET BANK 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 SUPREMO FUNDO with a short position of ASSET BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUPREMO FUNDO and ASSET BANK.

Diversification Opportunities for SUPREMO FUNDO and ASSET BANK

0.0

Correlation Coefficient

SUPREMO FUNDO  ASSET BANK

Pay attention - limited upside

The 3 months correlation between SUPREMO and ASSET is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SUPREMO FUNDO DE and ASSET BANK AGRONEGCIOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSET BANK AGRONEGCIOS and SUPREMO FUNDO 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 SUPREMO FUNDO DE are associated (or correlated) with ASSET BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSET BANK AGRONEGCIOS has no effect on the direction of SUPREMO FUNDO i.e., SUPREMO FUNDO and ASSET BANK go up and down completely randomly.

Pair Corralation between SUPREMO FUNDO and ASSET BANK

Assuming the 90 days trading horizon SUPREMO FUNDO is expected to generate 2.23 times less return on investment than ASSET BANK. But when comparing it to its historical volatility, SUPREMO FUNDO DE is 4.26 times less risky than ASSET BANK. It trades about 0.06 of its potential returns per unit of risk. ASSET BANK AGRONEGCIOS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,769  in ASSET BANK AGRONEGCIOS on October 11, 2024 and sell it today you would earn a total of  913.00  from holding ASSET BANK AGRONEGCIOS or generate 10.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	67.88%
Values	Daily Returns

SUPREMO FUNDO DE  vs.  ASSET BANK AGRONEGCIOS

SUPREMO FUNDO DE

Risk-Adjusted Performance

0 of 100

Very Weak

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

ASSET BANK AGRONEGCIOS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASSET BANK AGRONEGCIOS are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak technical and fundamental indicators, ASSET BANK may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SUPREMO FUNDO and ASSET BANK

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

The idea behind SUPREMO FUNDO DE and ASSET BANK AGRONEGCIOS 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.