Correlation Between Fras Le and Aesapar Fundo
Can any of the company-specific risk be diversified away by investing in both Fras Le and Aesapar 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 Fras Le and Aesapar Fundo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fras le SA and Aesapar Fundo de, you can compare the effects of market volatilities on Fras Le and Aesapar 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 Fras Le with a short position of Aesapar Fundo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fras Le and Aesapar Fundo.
Diversification Opportunities for Fras Le and Aesapar Fundo
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fras and Aesapar is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fras le SA and Aesapar Fundo de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesapar Fundo de and Fras Le 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 Fras le SA are associated (or correlated) with Aesapar Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesapar Fundo de has no effect on the direction of Fras Le i.e., Fras Le and Aesapar Fundo go up and down completely randomly.
Pair Corralation between Fras Le and Aesapar Fundo
Assuming the 90 days trading horizon Fras le SA is expected to generate 1.6 times more return on investment than Aesapar Fundo. However, Fras Le is 1.6 times more volatile than Aesapar Fundo de. It trades about 0.11 of its potential returns per unit of risk. Aesapar Fundo de is currently generating about 0.01 per unit of risk. If you would invest 931.00 in Fras le SA on September 5, 2024 and sell it today you would earn a total of 1,097 from holding Fras le SA or generate 117.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Fras le SA vs. Aesapar Fundo de
Performance |
| Timeline |
| Fras le SA |
| Aesapar Fundo de |
Fras Le and Aesapar Fundo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fras Le and Aesapar Fundo
The main advantage of trading using opposite Fras Le and Aesapar Fundo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fras Le position performs unexpectedly, Aesapar 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 Aesapar Fundo will offset losses from the drop in Aesapar Fundo's long position.The idea behind Fras le SA and Aesapar Fundo de 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.| Aesapar Fundo vs. Fras le SA | Aesapar Fundo vs. Western Digital | Aesapar Fundo vs. Clave Indices De | Aesapar Fundo vs. BTG Pactual Logstica |
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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