Correlation Between Bresco Fundo and Loft II
Can any of the company-specific risk be diversified away by investing in both Bresco Fundo and Loft II 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 Bresco Fundo and Loft II into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bresco Fundo and Loft II Fundo, you can compare the effects of market volatilities on Bresco Fundo and Loft II 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 Bresco Fundo with a short position of Loft II. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bresco Fundo and Loft II.
Diversification Opportunities for Bresco Fundo and Loft II
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bresco and Loft is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bresco Fundo and Loft II Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loft II Fundo and Bresco Fundo 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 Bresco Fundo are associated (or correlated) with Loft II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loft II Fundo has no effect on the direction of Bresco Fundo i.e., Bresco Fundo and Loft II go up and down completely randomly.
Pair Corralation between Bresco Fundo and Loft II
Assuming the 90 days trading horizon Bresco Fundo is expected to generate 0.18 times more return on investment than Loft II. However, Bresco Fundo is 5.42 times less risky than Loft II. It trades about -0.01 of its potential returns per unit of risk. Loft II Fundo is currently generating about -0.08 per unit of risk. If you would invest 10,800 in Bresco Fundo on November 28, 2024 and sell it today you would lose (630.00) from holding Bresco Fundo or give up 5.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bresco Fundo vs. Loft II Fundo
Performance |
| Timeline |
| Bresco Fundo |
| Loft II Fundo |
Bresco Fundo and Loft II Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bresco Fundo and Loft II
The main advantage of trading using opposite Bresco Fundo and Loft II positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bresco Fundo position performs unexpectedly, Loft II 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 Loft II will offset losses from the drop in Loft II's long position.| Bresco Fundo vs. Energisa SA | Bresco Fundo vs. BTG Pactual Logstica | Bresco Fundo vs. Plano Plano Desenvolvimento | Bresco Fundo vs. Ares Management |
| Loft II vs. Domo Fundo de | Loft II vs. Aesapar Fundo de | Loft II vs. Ourinvest Jpp Fundo | Loft II vs. Kinea Hedge Fund |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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