Correlation Between Real Estate and FUNDO DE
Can any of the company-specific risk be diversified away by investing in both Real Estate and FUNDO 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 Real Estate and FUNDO DE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Estate Investment and FUNDO DE INVESTIMENTO, you can compare the effects of market volatilities on Real Estate and FUNDO 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 Real Estate with a short position of FUNDO DE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Estate and FUNDO DE.
Diversification Opportunities for Real Estate and FUNDO DE
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Real and FUNDO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Real Estate Investment and FUNDO DE INVESTIMENTO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUNDO DE INVESTIMENTO and Real Estate 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 Real Estate Investment are associated (or correlated) with FUNDO DE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUNDO DE INVESTIMENTO has no effect on the direction of Real Estate i.e., Real Estate and FUNDO DE go up and down completely randomly.
Pair Corralation between Real Estate and FUNDO DE
Assuming the 90 days trading horizon Real Estate Investment is expected to generate 0.65 times more return on investment than FUNDO DE. However, Real Estate Investment is 1.54 times less risky than FUNDO DE. It trades about -0.13 of its potential returns per unit of risk. FUNDO DE INVESTIMENTO is currently generating about -0.12 per unit of risk. If you would invest 852.00 in Real Estate Investment on September 1, 2024 and sell it today you would lose (21.00) from holding Real Estate Investment or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Real Estate Investment vs. FUNDO DE INVESTIMENTO
Performance |
| Timeline |
| Real Estate Investment |
| FUNDO DE INVESTIMENTO |
Real Estate and FUNDO DE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Estate and FUNDO DE
The main advantage of trading using opposite Real Estate and FUNDO DE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Estate position performs unexpectedly, FUNDO 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 FUNDO DE will offset losses from the drop in FUNDO DE's long position.| Real Estate vs. Energisa SA | Real Estate vs. BTG Pactual Logstica | Real Estate vs. Plano Plano Desenvolvimento | Real Estate vs. Companhia Habitasul de |
| FUNDO DE vs. Energisa SA | FUNDO DE vs. BTG Pactual Logstica | FUNDO DE vs. Plano Plano Desenvolvimento | FUNDO DE vs. Companhia Habitasul 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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