Correlation Between Basic Materials and Fator IFIX
Can any of the company-specific risk be diversified away by investing in both Basic Materials and Fator IFIX 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 Basic Materials and Fator IFIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Materials and Fator IFIX Fundo, you can compare the effects of market volatilities on Basic Materials and Fator IFIX 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 Basic Materials with a short position of Fator IFIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Materials and Fator IFIX.
Diversification Opportunities for Basic Materials and Fator IFIX
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Basic and Fator is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Basic Materials and Fator IFIX Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fator IFIX Fundo and Basic Materials 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 Basic Materials are associated (or correlated) with Fator IFIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fator IFIX Fundo has no effect on the direction of Basic Materials i.e., Basic Materials and Fator IFIX go up and down completely randomly.
Pair Corralation between Basic Materials and Fator IFIX
If you would invest 592,195 in Basic Materials on August 26, 2024 and sell it today you would lose (15,954) from holding Basic Materials or give up 2.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Basic Materials vs. Fator IFIX Fundo
Performance |
| Timeline |
Basic Materials and Fator IFIX Volatility Contrast
Predicted Return Density |
| Returns |
Basic Materials
Pair trading matchups for Basic Materials
Fator IFIX Fundo
Pair trading matchups for Fator IFIX
Pair Trading with Basic Materials and Fator IFIX
The main advantage of trading using opposite Basic Materials and Fator IFIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Materials position performs unexpectedly, Fator IFIX 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 Fator IFIX will offset losses from the drop in Fator IFIX's long position.| Basic Materials vs. Bread Financial Holdings | Basic Materials vs. METISA Metalrgica Timboense | Basic Materials vs. Verizon Communications | Basic Materials vs. Prudential Financial |
| Fator IFIX vs. Energisa SA | Fator IFIX vs. BTG Pactual Logstica | Fator IFIX vs. Plano Plano Desenvolvimento | Fator IFIX vs. Companhia Habitasul de |
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 CEOs Directory module to screen CEOs from public companies around the world.
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