Correlation Between Loft II and JFL Living
Can any of the company-specific risk be diversified away by investing in both Loft II and JFL Living 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 JFL Living 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 JFL Living Fundo, you can compare the effects of market volatilities on Loft II and JFL Living 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 JFL Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loft II and JFL Living.
Diversification Opportunities for Loft II and JFL Living
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Loft and JFL is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Loft II Fundo and JFL Living Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JFL Living Fundo 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 JFL Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JFL Living Fundo has no effect on the direction of Loft II i.e., Loft II and JFL Living go up and down completely randomly.
Pair Corralation between Loft II and JFL Living
Assuming the 90 days trading horizon Loft II Fundo is expected to under-perform the JFL Living. In addition to that, Loft II is 6.1 times more volatile than JFL Living Fundo. It trades about -0.1 of its total potential returns per unit of risk. JFL Living Fundo is currently generating about 0.0 per unit of volatility. If you would invest 7,434 in JFL Living Fundo on August 26, 2024 and sell it today you would lose (29.00) from holding JFL Living Fundo or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loft II Fundo vs. JFL Living Fundo
Performance |
| Timeline |
| Loft II Fundo |
| JFL Living Fundo |
Loft II and JFL Living Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loft II and JFL Living
The main advantage of trading using opposite Loft II and JFL Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loft II position performs unexpectedly, JFL Living 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 JFL Living will offset losses from the drop in JFL Living's long position.| Loft II vs. BTG Pactual Logstica | Loft II vs. Plano Plano Desenvolvimento | Loft II vs. Companhia Habitasul de | Loft II vs. The Procter Gamble |
| JFL Living vs. BTG Pactual Logstica | JFL Living vs. Plano Plano Desenvolvimento | JFL Living vs. Companhia Habitasul de | JFL Living vs. The Procter Gamble |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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