Correlation Between Domo Fundo and Oi SA
Can any of the company-specific risk be diversified away by investing in both Domo Fundo and Oi SA 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 Domo Fundo and Oi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Domo Fundo de and Oi SA, you can compare the effects of market volatilities on Domo Fundo and Oi SA 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 Domo Fundo with a short position of Oi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Domo Fundo and Oi SA.
Diversification Opportunities for Domo Fundo and Oi SA
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Domo and OIBR3 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Domo Fundo de and Oi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oi SA and Domo Fundo 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 Domo Fundo de are associated (or correlated) with Oi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oi SA has no effect on the direction of Domo Fundo i.e., Domo Fundo and Oi SA go up and down completely randomly.
Pair Corralation between Domo Fundo and Oi SA
Assuming the 90 days trading horizon Domo Fundo de is expected to under-perform the Oi SA. But the fund apears to be less risky and, when comparing its historical volatility, Domo Fundo de is 2.81 times less risky than Oi SA. The fund trades about -0.39 of its potential returns per unit of risk. The Oi SA is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Oi SA on November 2, 2024 and sell it today you would earn a total of 28.00 from holding Oi SA or generate 20.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Domo Fundo de vs. Oi SA
Performance |
| Timeline |
| Domo Fundo de |
| Oi SA |
Domo Fundo and Oi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Domo Fundo and Oi SA
The main advantage of trading using opposite Domo Fundo and Oi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Domo Fundo position performs unexpectedly, Oi SA 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 Oi SA will offset losses from the drop in Oi SA's long position.| Domo Fundo vs. FDO INV IMOB | Domo Fundo vs. SUPREMO FUNDO DE | Domo Fundo vs. Real Estate Investment | Domo Fundo vs. NAVI CRDITO IMOBILIRIO |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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