Correlation Between Fator IFIX and Real Estate
Can any of the company-specific risk be diversified away by investing in both Fator IFIX and Real Estate 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 Fator IFIX and Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fator IFIX Fundo and Real Estate Investment, you can compare the effects of market volatilities on Fator IFIX and Real Estate 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 Fator IFIX with a short position of Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fator IFIX and Real Estate.
Diversification Opportunities for Fator IFIX and Real Estate
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fator and Real is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fator IFIX Fundo and Real Estate Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Investment and Fator IFIX 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 Fator IFIX Fundo are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Investment has no effect on the direction of Fator IFIX i.e., Fator IFIX and Real Estate go up and down completely randomly.
Pair Corralation between Fator IFIX and Real Estate
Assuming the 90 days trading horizon Fator IFIX is expected to generate 277.61 times less return on investment than Real Estate. But when comparing it to its historical volatility, Fator IFIX Fundo is 90.58 times less risky than Real Estate. It trades about 0.03 of its potential returns per unit of risk. Real Estate Investment is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 741.00 in Real Estate Investment on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Real Estate Investment or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Fator IFIX Fundo vs. Real Estate Investment
Performance |
| Timeline |
| Fator IFIX Fundo |
| Real Estate Investment |
Fator IFIX and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fator IFIX and Real Estate
The main advantage of trading using opposite Fator IFIX and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fator IFIX position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| Fator IFIX vs. Real Estate Investment | Fator IFIX vs. NAVI CRDITO IMOBILIRIO | Fator IFIX vs. LIFE CAPITAL PARTNERS | Fator IFIX vs. Cshg Jhsf Prime |
| Real Estate vs. Energisa SA | Real Estate vs. BTG Pactual Logstica | Real Estate vs. Plano Plano Desenvolvimento | Real Estate 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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