Correlation Between Caixa Rio and LESTE FDO
Can any of the company-specific risk be diversified away by investing in both Caixa Rio and LESTE FDO 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 Caixa Rio and LESTE FDO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixa Rio Bravo and LESTE FDO INV, you can compare the effects of market volatilities on Caixa Rio and LESTE FDO 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 Caixa Rio with a short position of LESTE FDO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixa Rio and LESTE FDO.
Diversification Opportunities for Caixa Rio and LESTE FDO
Very poor diversification
The 3 months correlation between Caixa and LESTE is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Caixa Rio Bravo and LESTE FDO INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LESTE FDO INV and Caixa Rio 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 Caixa Rio Bravo are associated (or correlated) with LESTE FDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LESTE FDO INV has no effect on the direction of Caixa Rio i.e., Caixa Rio and LESTE FDO go up and down completely randomly.
Pair Corralation between Caixa Rio and LESTE FDO
Assuming the 90 days trading horizon Caixa Rio Bravo is expected to under-perform the LESTE FDO. In addition to that, Caixa Rio is 1.71 times more volatile than LESTE FDO INV. It trades about -0.18 of its total potential returns per unit of risk. LESTE FDO INV is currently generating about -0.2 per unit of volatility. If you would invest 7,249 in LESTE FDO INV on September 14, 2024 and sell it today you would lose (450.00) from holding LESTE FDO INV or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caixa Rio Bravo vs. LESTE FDO INV
Performance |
| Timeline |
| Caixa Rio Bravo |
| LESTE FDO INV |
Caixa Rio and LESTE FDO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixa Rio and LESTE FDO
The main advantage of trading using opposite Caixa Rio and LESTE FDO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixa Rio position performs unexpectedly, LESTE FDO 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 LESTE FDO will offset losses from the drop in LESTE FDO's long position.| Caixa Rio vs. BTG Pactual Logstica | Caixa Rio vs. Fundo Investimento Imobiliario | Caixa Rio vs. KILIMA VOLKANO RECEBVEIS | Caixa Rio vs. DEVANT PROPERTIES FUNDO |
| LESTE FDO vs. HUSI11 | LESTE FDO vs. PANORAMA REAL ESTATE | LESTE FDO vs. Caixa Rio Bravo | LESTE FDO vs. Tishman Speyer Renda |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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