Correlation Between Lupatech and LESTE FDO
Can any of the company-specific risk be diversified away by investing in both Lupatech and LESTE FDO 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 Lupatech and LESTE FDO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and LESTE FDO INV, you can compare the effects of market volatilities on Lupatech and LESTE FDO 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 Lupatech with a short position of LESTE FDO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and LESTE FDO.
Diversification Opportunities for Lupatech and LESTE FDO
Very poor diversification
The 3 months correlation between Lupatech and LESTE is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA and LESTE FDO INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LESTE FDO INV and Lupatech 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 Lupatech SA are associated (or correlated) with LESTE FDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LESTE FDO INV has no effect on the direction of Lupatech i.e., Lupatech and LESTE FDO go up and down completely randomly.
Pair Corralation between Lupatech and LESTE FDO
Assuming the 90 days trading horizon Lupatech is expected to generate 1.18 times less return on investment than LESTE FDO. In addition to that, Lupatech is 1.92 times more volatile than LESTE FDO INV. It trades about 0.07 of its total potential returns per unit of risk. LESTE FDO INV is currently generating about 0.15 per unit of volatility. If you would invest 6,487 in LESTE FDO INV on October 20, 2024 and sell it today you would earn a total of 313.00 from holding LESTE FDO INV or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lupatech SA vs. LESTE FDO INV
Performance |
| Timeline |
| Lupatech SA |
| LESTE FDO INV |
Lupatech and LESTE FDO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and LESTE FDO
The main advantage of trading using opposite Lupatech and LESTE FDO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech position performs unexpectedly, LESTE FDO 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 LESTE FDO will offset losses from the drop in LESTE FDO's long position.| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Eternit SA |
| LESTE FDO vs. FDO INV IMOB | LESTE FDO vs. SUPREMO FUNDO DE | LESTE FDO vs. Real Estate Investment | LESTE FDO vs. NAVI CRDITO IMOBILIRIO |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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