Correlation Between Fundo Investimento and Intelbras

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

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

Diversification Opportunities for Fundo Investimento and Intelbras

0.73

Correlation Coefficient

Fundo Investimento  Intelbras

Poor diversification

The 3 months correlation between Fundo and Intelbras is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fundo Investimento Imobiliario and Intelbras SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelbras SA and Fundo Investimento 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 Investimento Imobiliario are associated (or correlated) with Intelbras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelbras SA has no effect on the direction of Fundo Investimento i.e., Fundo Investimento and Intelbras go up and down completely randomly.

Pair Corralation between Fundo Investimento and Intelbras

Assuming the 90 days trading horizon Fundo Investimento Imobiliario is expected to generate 0.98 times more return on investment than Intelbras. However, Fundo Investimento Imobiliario is 1.02 times less risky than Intelbras. It trades about 0.03 of its potential returns per unit of risk. Intelbras SA is currently generating about -0.06 per unit of risk. If you would invest  7,225  in Fundo Investimento Imobiliario on October 5, 2024 and sell it today you would earn a total of  1,302  from holding Fundo Investimento Imobiliario or generate 18.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.56%
Values	Daily Returns

Fundo Investimento Imobiliario  vs.  Intelbras SA

Fundo Investimento

Risk-Adjusted Performance

0 of 100

Very Weak

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

Intelbras SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelbras SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Fundo Investimento and Intelbras

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

The idea behind Fundo Investimento Imobiliario and Intelbras SA 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.