Correlation Between Vinci Corporate and XP Corporate

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

By analyzing existing cross correlation between Vinci Corporate Fundo and XP Corporate Maca, you can compare the effects of market volatilities on Vinci Corporate 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 Vinci Corporate with a short position of XP Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci Corporate and XP Corporate.

Diversification Opportunities for Vinci Corporate and XP Corporate

0.57

Correlation Coefficient

Vinci Corporate  XP Corporate

Very weak diversification

The 3 months correlation between Vinci and XPCM11 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vinci Corporate Fundo 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 Vinci Corporate 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 Vinci Corporate Fundo 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 Vinci Corporate i.e., Vinci Corporate and XP Corporate go up and down completely randomly.

Pair Corralation between Vinci Corporate and XP Corporate

Assuming the 90 days trading horizon Vinci Corporate Fundo is expected to generate 1.64 times more return on investment than XP Corporate. However, Vinci Corporate is 1.64 times more volatile than XP Corporate Maca. It trades about -0.03 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  758.00  in Vinci Corporate Fundo on October 10, 2024 and sell it today you would lose (286.00) from holding Vinci Corporate Fundo or give up 37.73% of portfolio value over 90 days.

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

Vinci Corporate Fundo  vs.  XP Corporate Maca

Vinci Corporate Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinci Corporate Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Vinci Corporate 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 Vinci Corporate and XP Corporate

The main advantage of trading using opposite Vinci Corporate and XP Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci Corporate 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 Vinci Corporate Fundo 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.