Correlation Between LESTE FDO and Cia De
Can any of the company-specific risk be diversified away by investing in both LESTE FDO and Cia De 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 Cia De 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 Cia de Ferro, you can compare the effects of market volatilities on LESTE FDO and Cia De 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 Cia De. Check out your portfolio center. Please also check ongoing floating volatility patterns of LESTE FDO and Cia De.
Diversification Opportunities for LESTE FDO and Cia De
Very weak diversification
The 3 months correlation between LESTE and Cia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding LESTE FDO INV and Cia de Ferro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cia de Ferro 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 Cia De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cia de Ferro has no effect on the direction of LESTE FDO i.e., LESTE FDO and Cia De go up and down completely randomly.
Pair Corralation between LESTE FDO and Cia De
Assuming the 90 days trading horizon LESTE FDO INV is expected to under-perform the Cia De. But the fund apears to be less risky and, when comparing its historical volatility, LESTE FDO INV is 9.79 times less risky than Cia De. The fund trades about -0.03 of its potential returns per unit of risk. The Cia de Ferro is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,319 in Cia de Ferro on August 26, 2024 and sell it today you would lose (526.00) from holding Cia de Ferro or give up 39.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.4% |
| Values | Daily Returns |
LESTE FDO INV vs. Cia de Ferro
Performance |
| Timeline |
| LESTE FDO INV |
| Cia de Ferro |
LESTE FDO and Cia De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LESTE FDO and Cia De
The main advantage of trading using opposite LESTE FDO and Cia De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LESTE FDO position performs unexpectedly, Cia De 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 Cia De will offset losses from the drop in Cia De's long position.| LESTE FDO vs. Real Estate Investment | LESTE FDO vs. NAVI CRDITO IMOBILIRIO | LESTE FDO vs. LIFE CAPITAL PARTNERS | LESTE FDO vs. Cshg Jhsf Prime |
| Cia De vs. Metalurgica Gerdau SA | Cia De vs. Companhia Siderrgica Nacional | Cia De vs. Companhia Energtica de | Cia De vs. Companhia Paranaense de |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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