Correlation Between LESTE FDO and Recrusul
Can any of the company-specific risk be diversified away by investing in both LESTE FDO and Recrusul 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 Recrusul 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 Recrusul SA, you can compare the effects of market volatilities on LESTE FDO and Recrusul 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 Recrusul. Check out your portfolio center. Please also check ongoing floating volatility patterns of LESTE FDO and Recrusul.
Diversification Opportunities for LESTE FDO and Recrusul
Excellent diversification
The 3 months correlation between LESTE and Recrusul is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding LESTE FDO INV and Recrusul SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recrusul SA 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 Recrusul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recrusul SA has no effect on the direction of LESTE FDO i.e., LESTE FDO and Recrusul go up and down completely randomly.
Pair Corralation between LESTE FDO and Recrusul
Assuming the 90 days trading horizon LESTE FDO INV is expected to generate 0.31 times more return on investment than Recrusul. However, LESTE FDO INV is 3.21 times less risky than Recrusul. It trades about -0.04 of its potential returns per unit of risk. Recrusul SA is currently generating about -0.04 per unit of risk. If you would invest 8,316 in LESTE FDO INV on September 14, 2024 and sell it today you would lose (1,517) from holding LESTE FDO INV or give up 18.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
LESTE FDO INV vs. Recrusul SA
Performance |
| Timeline |
| LESTE FDO INV |
| Recrusul SA |
LESTE FDO and Recrusul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LESTE FDO and Recrusul
The main advantage of trading using opposite LESTE FDO and Recrusul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LESTE FDO position performs unexpectedly, Recrusul 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 Recrusul will offset losses from the drop in Recrusul's long position.| LESTE FDO vs. HUSI11 | LESTE FDO vs. PANORAMA REAL ESTATE | LESTE FDO vs. Caixa Rio Bravo | LESTE FDO vs. Tishman Speyer Renda |
| Recrusul vs. Recrusul SA | Recrusul vs. Lupatech SA | Recrusul vs. Viver Incorporadora e | Recrusul vs. Triunfo Participaes e |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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