Correlation Between Loft II and Manufatura
Can any of the company-specific risk be diversified away by investing in both Loft II and Manufatura 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 Loft II and Manufatura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loft II Fundo and Manufatura de Brinquedos, you can compare the effects of market volatilities on Loft II and Manufatura 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 Loft II with a short position of Manufatura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loft II and Manufatura.
Diversification Opportunities for Loft II and Manufatura
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Loft and Manufatura is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Loft II Fundo and Manufatura de Brinquedos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manufatura de Brinquedos and Loft II 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 Loft II Fundo are associated (or correlated) with Manufatura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manufatura de Brinquedos has no effect on the direction of Loft II i.e., Loft II and Manufatura go up and down completely randomly.
Pair Corralation between Loft II and Manufatura
If you would invest 350.00 in Manufatura de Brinquedos on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Manufatura de Brinquedos or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Loft II Fundo vs. Manufatura de Brinquedos
Performance |
| Timeline |
| Loft II Fundo |
| Manufatura de Brinquedos |
Loft II and Manufatura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loft II and Manufatura
The main advantage of trading using opposite Loft II and Manufatura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loft II position performs unexpectedly, Manufatura 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 Manufatura will offset losses from the drop in Manufatura's long position.| Loft II vs. Domo Fundo de | Loft II vs. Aesapar Fundo de | Loft II vs. Ourinvest Jpp Fundo | Loft II vs. Kinea Hedge Fund |
| Manufatura vs. Inepar SA Indstria | Manufatura vs. Bombril SA | Manufatura vs. Hotis Othon SA | Manufatura vs. Hrcules SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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