Correlation Between Kinea Indices and Kinea Creditas
Can any of the company-specific risk be diversified away by investing in both Kinea Indices and Kinea Creditas 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 Kinea Indices and Kinea Creditas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinea Indices Precos and Kinea Creditas Fundo, you can compare the effects of market volatilities on Kinea Indices and Kinea Creditas 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 Kinea Indices with a short position of Kinea Creditas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinea Indices and Kinea Creditas.
Diversification Opportunities for Kinea Indices and Kinea Creditas
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinea and Kinea is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Indices Precos and Kinea Creditas Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Creditas Fundo and Kinea Indices 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 Kinea Indices Precos are associated (or correlated) with Kinea Creditas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Creditas Fundo has no effect on the direction of Kinea Indices i.e., Kinea Indices and Kinea Creditas go up and down completely randomly.
Pair Corralation between Kinea Indices and Kinea Creditas
Assuming the 90 days trading horizon Kinea Indices Precos is expected to under-perform the Kinea Creditas. But the fund apears to be less risky and, when comparing its historical volatility, Kinea Indices Precos is 2.1 times less risky than Kinea Creditas. The fund trades about -0.09 of its potential returns per unit of risk. The Kinea Creditas Fundo is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 886.00 in Kinea Creditas Fundo on August 30, 2024 and sell it today you would earn a total of 34.00 from holding Kinea Creditas Fundo or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinea Indices Precos vs. Kinea Creditas Fundo
Performance |
| Timeline |
| Kinea Indices Precos |
| Kinea Creditas Fundo |
Kinea Indices and Kinea Creditas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinea Indices and Kinea Creditas
The main advantage of trading using opposite Kinea Indices and Kinea Creditas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinea Indices position performs unexpectedly, Kinea Creditas 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 Kinea Creditas will offset losses from the drop in Kinea Creditas' long position.| Kinea Indices vs. Kinea Oportunidades Real | Kinea Indices vs. Kinea Creditas Fundo | Kinea Indices vs. Kinea Securities Fundo | Kinea Indices vs. Kinea Renda Imobiliria |
| Kinea Creditas vs. Kinea Oportunidades Real | Kinea Creditas vs. Kinea Indices Precos | Kinea Creditas vs. Kinea Securities Fundo | Kinea Creditas vs. Kinea Renda Imobiliria |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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