Correlation Between LESTE FDO and British American
Can any of the company-specific risk be diversified away by investing in both LESTE FDO and British American 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 LESTE FDO and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LESTE FDO INV and British American Tobacco, you can compare the effects of market volatilities on LESTE FDO and British American 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 LESTE FDO with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of LESTE FDO and British American.
Diversification Opportunities for LESTE FDO and British American
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LESTE and British is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding LESTE FDO INV and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and LESTE FDO 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 LESTE FDO INV are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of LESTE FDO i.e., LESTE FDO and British American go up and down completely randomly.
Pair Corralation between LESTE FDO and British American
Assuming the 90 days trading horizon LESTE FDO INV is expected to under-perform the British American. In addition to that, LESTE FDO is 1.44 times more volatile than British American Tobacco. It trades about -0.12 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.58 per unit of volatility. If you would invest 4,061 in British American Tobacco on September 12, 2024 and sell it today you would earn a total of 499.00 from holding British American Tobacco or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LESTE FDO INV vs. British American Tobacco
Performance |
| Timeline |
| LESTE FDO INV |
| British American Tobacco |
LESTE FDO and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LESTE FDO and British American
The main advantage of trading using opposite LESTE FDO and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LESTE FDO position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| LESTE FDO vs. FDO INV IMOB | LESTE FDO vs. SUPREMO FUNDO DE | LESTE FDO vs. Real Estate Investment | LESTE FDO vs. NAVI CRDITO IMOBILIRIO |
| British American vs. Fundo Investimento Imobiliario | British American vs. LESTE FDO INV | British American vs. Fras le SA | British American vs. Western Digital |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |