Correlation Between FUNDO DE and EXES FUNDO

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

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

Diversification Opportunities for FUNDO DE and EXES FUNDO

-0.59

Correlation Coefficient

FUNDO DE  EXES FUNDO

Excellent diversification

The 3 months correlation between FUNDO and EXES is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding FUNDO DE INVESTIMENTO and EXES FUNDO DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXES FUNDO DE and FUNDO DE 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 FUNDO DE INVESTIMENTO are associated (or correlated) with EXES FUNDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXES FUNDO DE has no effect on the direction of FUNDO DE i.e., FUNDO DE and EXES FUNDO go up and down completely randomly.

Pair Corralation between FUNDO DE and EXES FUNDO

Assuming the 90 days trading horizon FUNDO DE INVESTIMENTO is expected to under-perform the EXES FUNDO. In addition to that, FUNDO DE is 2.23 times more volatile than EXES FUNDO DE. It trades about -0.17 of its total potential returns per unit of risk. EXES FUNDO DE is currently generating about 0.0 per unit of volatility. If you would invest  949.00  in EXES FUNDO DE on September 15, 2024 and sell it today you would earn a total of  0.00  from holding EXES FUNDO DE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.0%
Values	Daily Returns

FUNDO DE INVESTIMENTO  vs.  EXES FUNDO DE

FUNDO DE INVESTIMENTO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FUNDO DE INVESTIMENTO 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.

EXES FUNDO DE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EXES FUNDO DE are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, EXES FUNDO is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FUNDO DE and EXES FUNDO

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

The idea behind FUNDO DE INVESTIMENTO and EXES FUNDO DE 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..