Correlation Between BB Renda and SPARTA FIAGRO
Can any of the company-specific risk be diversified away by investing in both BB Renda and SPARTA FIAGRO 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 BB Renda and SPARTA FIAGRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Renda Corporativa and SPARTA FIAGRO FDO, you can compare the effects of market volatilities on BB Renda and SPARTA FIAGRO 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 BB Renda with a short position of SPARTA FIAGRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Renda and SPARTA FIAGRO.
Diversification Opportunities for BB Renda and SPARTA FIAGRO
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BBRC11 and SPARTA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BB Renda Corporativa and SPARTA FIAGRO FDO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTA FIAGRO FDO and BB Renda 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 BB Renda Corporativa are associated (or correlated) with SPARTA FIAGRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTA FIAGRO FDO has no effect on the direction of BB Renda i.e., BB Renda and SPARTA FIAGRO go up and down completely randomly.
Pair Corralation between BB Renda and SPARTA FIAGRO
Assuming the 90 days trading horizon BB Renda Corporativa is expected to generate 1.47 times more return on investment than SPARTA FIAGRO. However, BB Renda is 1.47 times more volatile than SPARTA FIAGRO FDO. It trades about -0.1 of its potential returns per unit of risk. SPARTA FIAGRO FDO is currently generating about -0.18 per unit of risk. If you would invest 11,009 in BB Renda Corporativa on November 2, 2024 and sell it today you would lose (1,551) from holding BB Renda Corporativa or give up 14.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Renda Corporativa vs. SPARTA FIAGRO FDO
Performance |
| Timeline |
| BB Renda Corporativa |
| SPARTA FIAGRO FDO |
BB Renda and SPARTA FIAGRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Renda and SPARTA FIAGRO
The main advantage of trading using opposite BB Renda and SPARTA FIAGRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Renda position performs unexpectedly, SPARTA FIAGRO 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 SPARTA FIAGRO will offset losses from the drop in SPARTA FIAGRO's long position.| BB Renda vs. BTG Pactual Logstica | BB Renda vs. Btg Pactual Real | BB Renda vs. Fundo Investimento Imobiliario | BB Renda vs. KILIMA VOLKANO RECEBVEIS |
| SPARTA FIAGRO vs. BTG Pactual Logstica | SPARTA FIAGRO vs. Btg Pactual Real | SPARTA FIAGRO vs. Fundo Investimento Imobiliario | SPARTA FIAGRO vs. KILIMA VOLKANO RECEBVEIS |
Check out your portfolio center.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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