Correlation Between Hedge Top and LIFE CAPITAL
Can any of the company-specific risk be diversified away by investing in both Hedge Top and LIFE CAPITAL 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 Top and LIFE CAPITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hedge Top Fofii and LIFE CAPITAL PARTNERS, you can compare the effects of market volatilities on Hedge Top and LIFE CAPITAL 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 Top with a short position of LIFE CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hedge Top and LIFE CAPITAL.
Diversification Opportunities for Hedge Top and LIFE CAPITAL
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hedge and LIFE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hedge Top Fofii and LIFE CAPITAL PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE CAPITAL PARTNERS and Hedge Top 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 Top Fofii are associated (or correlated) with LIFE CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE CAPITAL PARTNERS has no effect on the direction of Hedge Top i.e., Hedge Top and LIFE CAPITAL go up and down completely randomly.
Pair Corralation between Hedge Top and LIFE CAPITAL
Assuming the 90 days trading horizon Hedge Top Fofii is expected to under-perform the LIFE CAPITAL. But the fund apears to be less risky and, when comparing its historical volatility, Hedge Top Fofii is 3.48 times less risky than LIFE CAPITAL. The fund trades about -0.24 of its potential returns per unit of risk. The LIFE CAPITAL PARTNERS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 833.00 in LIFE CAPITAL PARTNERS on October 25, 2024 and sell it today you would earn a total of 23.00 from holding LIFE CAPITAL PARTNERS or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Hedge Top Fofii vs. LIFE CAPITAL PARTNERS
Performance |
| Timeline |
| Hedge Top Fofii |
| LIFE CAPITAL PARTNERS |
Hedge Top and LIFE CAPITAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hedge Top and LIFE CAPITAL
The main advantage of trading using opposite Hedge Top and LIFE CAPITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hedge Top position performs unexpectedly, LIFE CAPITAL 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 LIFE CAPITAL will offset losses from the drop in LIFE CAPITAL's long position.| Hedge Top vs. Energisa SA | Hedge Top vs. BTG Pactual Logstica | Hedge Top vs. Plano Plano Desenvolvimento | Hedge Top vs. Ares Management |
| LIFE CAPITAL vs. FDO INV IMOB | LIFE CAPITAL vs. SUPREMO FUNDO DE | LIFE CAPITAL vs. Real Estate Investment | LIFE CAPITAL vs. NAVI CRDITO IMOBILIRIO |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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