Correlation Between Companhia Habitasul and CAIXA ETF
Can any of the company-specific risk be diversified away by investing in both Companhia Habitasul and CAIXA ETF 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 Companhia Habitasul and CAIXA ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Habitasul de and CAIXA ETF Ibovespa, you can compare the effects of market volatilities on Companhia Habitasul and CAIXA ETF 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 Companhia Habitasul with a short position of CAIXA ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Habitasul and CAIXA ETF.
Diversification Opportunities for Companhia Habitasul and CAIXA ETF
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Companhia and CAIXA is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Habitasul de and CAIXA ETF Ibovespa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIXA ETF Ibovespa and Companhia Habitasul 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 Companhia Habitasul de are associated (or correlated) with CAIXA ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIXA ETF Ibovespa has no effect on the direction of Companhia Habitasul i.e., Companhia Habitasul and CAIXA ETF go up and down completely randomly.
Pair Corralation between Companhia Habitasul and CAIXA ETF
Assuming the 90 days trading horizon Companhia Habitasul de is expected to generate 2.1 times more return on investment than CAIXA ETF. However, Companhia Habitasul is 2.1 times more volatile than CAIXA ETF Ibovespa. It trades about -0.08 of its potential returns per unit of risk. CAIXA ETF Ibovespa is currently generating about -0.21 per unit of risk. If you would invest 3,000 in Companhia Habitasul de on September 4, 2024 and sell it today you would lose (98.00) from holding Companhia Habitasul de or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Habitasul de vs. CAIXA ETF Ibovespa
Performance |
| Timeline |
| Companhia Habitasul |
| CAIXA ETF Ibovespa |
Companhia Habitasul and CAIXA ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Habitasul and CAIXA ETF
The main advantage of trading using opposite Companhia Habitasul and CAIXA ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Habitasul position performs unexpectedly, CAIXA ETF 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 CAIXA ETF will offset losses from the drop in CAIXA ETF's long position.| Companhia Habitasul vs. Hotis Othon SA | Companhia Habitasul vs. Hrcules SA | Companhia Habitasul vs. Eucatex SA Indstria | Companhia Habitasul vs. General Shopping e |
| CAIXA ETF vs. RB Capital Office | CAIXA ETF vs. Ishares Msci Brazil | CAIXA ETF vs. Investo Etf Global | CAIXA ETF vs. iShares BMFBovespa Small |
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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