Correlation Between FDO INV and Bresco Fundo
Can any of the company-specific risk be diversified away by investing in both FDO INV and Bresco Fundo 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 Bresco Fundo 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 Bresco Fundo, you can compare the effects of market volatilities on FDO INV and Bresco Fundo 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 Bresco Fundo. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDO INV and Bresco Fundo.
Diversification Opportunities for FDO INV and Bresco Fundo
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FDO and Bresco is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and Bresco Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bresco Fundo 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 Bresco Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bresco Fundo has no effect on the direction of FDO INV i.e., FDO INV and Bresco Fundo go up and down completely randomly.
Pair Corralation between FDO INV and Bresco Fundo
Assuming the 90 days trading horizon FDO INV IMOB is expected to generate 41.41 times more return on investment than Bresco Fundo. However, FDO INV is 41.41 times more volatile than Bresco Fundo. It trades about 0.07 of its potential returns per unit of risk. Bresco Fundo is currently generating about -0.01 per unit of risk. If you would invest 20.00 in FDO INV IMOB on September 12, 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 | Very Weak |
| Accuracy | 68.47% |
| Values | Daily Returns |
FDO INV IMOB vs. Bresco Fundo
Performance |
| Timeline |
| FDO INV IMOB |
| Bresco Fundo |
FDO INV and Bresco Fundo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FDO INV and Bresco Fundo
The main advantage of trading using opposite FDO INV and Bresco Fundo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDO INV position performs unexpectedly, Bresco Fundo 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 Bresco Fundo will offset losses from the drop in Bresco Fundo's long position.| FDO INV vs. BTG Pactual Logstica | FDO INV vs. Plano Plano Desenvolvimento | FDO INV vs. Companhia Habitasul de | FDO INV vs. Telefonaktiebolaget LM Ericsson |
| Bresco Fundo vs. BTG Pactual Logstica | Bresco Fundo vs. Plano Plano Desenvolvimento | Bresco Fundo vs. Companhia Habitasul de | Bresco Fundo vs. FDO INV IMOB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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