Correlation Between FUNDO DE and Fundos De

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

Diversification Opportunities for FUNDO DE and Fundos De

-0.21

Correlation Coefficient

FUNDO DE  Fundos De

Very good diversification

The 3 months correlation between FUNDO and Fundos is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding FUNDO DE INVESTIMENTO and Fundos de Investimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundos de Investimento 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 Fundos De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundos de Investimento has no effect on the direction of FUNDO DE i.e., FUNDO DE and Fundos De go up and down completely randomly.

Pair Corralation between FUNDO DE and Fundos De

Assuming the 90 days trading horizon FUNDO DE INVESTIMENTO is expected to under-perform the Fundos De. But the fund apears to be less risky and, when comparing its historical volatility, FUNDO DE INVESTIMENTO is 1.76 times less risky than Fundos De. The fund trades about -0.07 of its potential returns per unit of risk. The Fundos de Investimento is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,000  in Fundos de Investimento on October 23, 2024 and sell it today you would lose (390.00) from holding Fundos de Investimento or give up 9.75% of portfolio value over 90 days.

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

FUNDO DE INVESTIMENTO  vs.  Fundos de Investimento

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.

Fundos de Investimento

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundos de Investimento has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Fundos De 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 Fundos De

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

The idea behind FUNDO DE INVESTIMENTO and Fundos de Investimento 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.