Correlation Between FDO INV and ATMA Participaes
Can any of the company-specific risk be diversified away by investing in both FDO INV and ATMA Participaes 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 FDO INV and ATMA Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FDO INV IMOB and ATMA Participaes SA, you can compare the effects of market volatilities on FDO INV and ATMA Participaes 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 FDO INV with a short position of ATMA Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDO INV and ATMA Participaes.
Diversification Opportunities for FDO INV and ATMA Participaes
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FDO and ATMA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and ATMA Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMA Participaes and FDO INV 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 FDO INV IMOB are associated (or correlated) with ATMA Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATMA Participaes has no effect on the direction of FDO INV i.e., FDO INV and ATMA Participaes go up and down completely randomly.
Pair Corralation between FDO INV and ATMA Participaes
Assuming the 90 days trading horizon FDO INV IMOB is expected to generate 13.12 times more return on investment than ATMA Participaes. However, FDO INV is 13.12 times more volatile than ATMA Participaes SA. It trades about 0.07 of its potential returns per unit of risk. ATMA Participaes SA is currently generating about 0.02 per unit of risk. If you would invest 20.00 in FDO INV IMOB on September 14, 2024 and sell it today you would earn a total of 144,980 from holding FDO INV IMOB or generate 724900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 48.7% |
| Values | Daily Returns |
FDO INV IMOB vs. ATMA Participaes SA
Performance |
| Timeline |
| FDO INV IMOB |
| ATMA Participaes |
FDO INV and ATMA Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FDO INV and ATMA Participaes
The main advantage of trading using opposite FDO INV and ATMA Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDO INV position performs unexpectedly, ATMA Participaes 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 ATMA Participaes will offset losses from the drop in ATMA Participaes' long position.The idea behind FDO INV IMOB and ATMA Participaes 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.| ATMA Participaes vs. Triunfo Participaes e | ATMA Participaes vs. Allpark Empreendimentos Participaes | ATMA Participaes vs. Azevedo Travassos SA | ATMA Participaes vs. Azevedo Travassos SA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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