Correlation Between KILIMA VOLKANO and Hedge Aaa
Can any of the company-specific risk be diversified away by investing in both KILIMA VOLKANO and Hedge Aaa 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 KILIMA VOLKANO and Hedge Aaa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KILIMA VOLKANO RECEBVEIS and Hedge Aaa Fundo, you can compare the effects of market volatilities on KILIMA VOLKANO and Hedge Aaa 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 KILIMA VOLKANO with a short position of Hedge Aaa. Check out your portfolio center. Please also check ongoing floating volatility patterns of KILIMA VOLKANO and Hedge Aaa.
Diversification Opportunities for KILIMA VOLKANO and Hedge Aaa
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between KILIMA and Hedge is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding KILIMA VOLKANO RECEBVEIS and Hedge Aaa Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedge Aaa Fundo and KILIMA VOLKANO 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 KILIMA VOLKANO RECEBVEIS are associated (or correlated) with Hedge Aaa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedge Aaa Fundo has no effect on the direction of KILIMA VOLKANO i.e., KILIMA VOLKANO and Hedge Aaa go up and down completely randomly.
Pair Corralation between KILIMA VOLKANO and Hedge Aaa
Assuming the 90 days trading horizon KILIMA VOLKANO RECEBVEIS is expected to generate 22.2 times more return on investment than Hedge Aaa. However, KILIMA VOLKANO is 22.2 times more volatile than Hedge Aaa Fundo. It trades about 0.03 of its potential returns per unit of risk. Hedge Aaa Fundo is currently generating about 0.02 per unit of risk. If you would invest 7,274 in KILIMA VOLKANO RECEBVEIS on August 30, 2024 and sell it today you would earn a total of 76.00 from holding KILIMA VOLKANO RECEBVEIS or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
KILIMA VOLKANO RECEBVEIS vs. Hedge Aaa Fundo
Performance |
| Timeline |
| KILIMA VOLKANO RECEBVEIS |
| Hedge Aaa Fundo |
KILIMA VOLKANO and Hedge Aaa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KILIMA VOLKANO and Hedge Aaa
The main advantage of trading using opposite KILIMA VOLKANO and Hedge Aaa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KILIMA VOLKANO position performs unexpectedly, Hedge Aaa 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 Hedge Aaa will offset losses from the drop in Hedge Aaa's long position.| KILIMA VOLKANO vs. Energisa SA | KILIMA VOLKANO vs. BTG Pactual Logstica | KILIMA VOLKANO vs. Plano Plano Desenvolvimento | KILIMA VOLKANO vs. The Procter Gamble |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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