Correlation Between SUPREMO FUNDO and XP Corporate

Can any of the company-specific risk be diversified away by investing in both SUPREMO FUNDO and XP Corporate 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 XP Corporate 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 XP Corporate Maca, you can compare the effects of market volatilities on SUPREMO FUNDO and XP Corporate 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 XP Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUPREMO FUNDO and XP Corporate.

Diversification Opportunities for SUPREMO FUNDO and XP Corporate

0.0

Correlation Coefficient

SUPREMO FUNDO  XP Corporate

Pay attention - limited upside

The 3 months correlation between SUPREMO and XPCM11 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SUPREMO FUNDO DE and XP Corporate Maca in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XP Corporate Maca 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 XP Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XP Corporate Maca has no effect on the direction of SUPREMO FUNDO i.e., SUPREMO FUNDO and XP Corporate go up and down completely randomly.

Pair Corralation between SUPREMO FUNDO and XP Corporate

Assuming the 90 days trading horizon SUPREMO FUNDO DE is expected to generate 0.69 times more return on investment than XP Corporate. However, SUPREMO FUNDO DE is 1.45 times less risky than XP Corporate. It trades about 0.06 of its potential returns per unit of risk. XP Corporate Maca is currently generating about -0.12 per unit of risk. If you would invest  11,990  in SUPREMO FUNDO DE on October 10, 2024 and sell it today you would earn a total of  2,410  from holding SUPREMO FUNDO DE or generate 20.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	66.6%
Values	Daily Returns

SUPREMO FUNDO DE  vs.  XP Corporate Maca

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.

XP Corporate Maca

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SUPREMO FUNDO and XP Corporate

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

The idea behind SUPREMO FUNDO DE and XP Corporate Maca 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.