Correlation Between Hedge Aaa and FDO INV
Can any of the company-specific risk be diversified away by investing in both Hedge Aaa and FDO INV 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 Hedge Aaa and FDO INV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hedge Aaa Fundo and FDO INV CAD, you can compare the effects of market volatilities on Hedge Aaa and FDO INV 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 Hedge Aaa with a short position of FDO INV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hedge Aaa and FDO INV.
Diversification Opportunities for Hedge Aaa and FDO INV
Poor diversification
The 3 months correlation between Hedge and FDO is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hedge Aaa Fundo and FDO INV CAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDO INV CAD and Hedge Aaa 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 Hedge Aaa Fundo are associated (or correlated) with FDO INV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDO INV CAD has no effect on the direction of Hedge Aaa i.e., Hedge Aaa and FDO INV go up and down completely randomly.
Pair Corralation between Hedge Aaa and FDO INV
Assuming the 90 days trading horizon Hedge Aaa Fundo is expected to under-perform the FDO INV. In addition to that, Hedge Aaa is 1.54 times more volatile than FDO INV CAD. It trades about -0.07 of its total potential returns per unit of risk. FDO INV CAD is currently generating about -0.05 per unit of volatility. If you would invest 1,055 in FDO INV CAD on September 2, 2024 and sell it today you would lose (263.00) from holding FDO INV CAD or give up 24.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.69% |
| Values | Daily Returns |
Hedge Aaa Fundo vs. FDO INV CAD
Performance |
| Timeline |
| Hedge Aaa Fundo |
| FDO INV CAD |
Hedge Aaa and FDO INV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hedge Aaa and FDO INV
The main advantage of trading using opposite Hedge Aaa and FDO INV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hedge Aaa position performs unexpectedly, FDO INV 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 FDO INV will offset losses from the drop in FDO INV's long position.| Hedge Aaa vs. BTG Pactual Logstica | Hedge Aaa vs. Fundo Investimento Imobiliario | Hedge Aaa vs. KILIMA VOLKANO RECEBVEIS | Hedge Aaa vs. DEVANT PROPERTIES FUNDO |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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