Correlation Between Santander Renda and SPARTA FIAGRO
Can any of the company-specific risk be diversified away by investing in both Santander Renda and SPARTA FIAGRO 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 Santander Renda and SPARTA FIAGRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santander Renda De and SPARTA FIAGRO FDO, you can compare the effects of market volatilities on Santander Renda and SPARTA FIAGRO 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 Santander Renda with a short position of SPARTA FIAGRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Renda and SPARTA FIAGRO.
Diversification Opportunities for Santander Renda and SPARTA FIAGRO
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Santander and SPARTA is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Santander Renda De and SPARTA FIAGRO FDO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTA FIAGRO FDO and Santander Renda 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 Santander Renda De are associated (or correlated) with SPARTA FIAGRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTA FIAGRO FDO has no effect on the direction of Santander Renda i.e., Santander Renda and SPARTA FIAGRO go up and down completely randomly.
Pair Corralation between Santander Renda and SPARTA FIAGRO
Assuming the 90 days trading horizon Santander Renda De is expected to under-perform the SPARTA FIAGRO. In addition to that, Santander Renda is 5.19 times more volatile than SPARTA FIAGRO FDO. It trades about -0.06 of its total potential returns per unit of risk. SPARTA FIAGRO FDO is currently generating about 0.06 per unit of volatility. If you would invest 8,000 in SPARTA FIAGRO FDO on August 30, 2024 and sell it today you would earn a total of 1,718 from holding SPARTA FIAGRO FDO or generate 21.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.5% |
| Values | Daily Returns |
Santander Renda De vs. SPARTA FIAGRO FDO
Performance |
| Timeline |
| Santander Renda De |
| SPARTA FIAGRO FDO |
Santander Renda and SPARTA FIAGRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Renda and SPARTA FIAGRO
The main advantage of trading using opposite Santander Renda and SPARTA FIAGRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Renda position performs unexpectedly, SPARTA FIAGRO 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 SPARTA FIAGRO will offset losses from the drop in SPARTA FIAGRO's long position.| Santander Renda vs. Energisa SA | Santander Renda vs. BTG Pactual Logstica | Santander Renda vs. Plano Plano Desenvolvimento | Santander Renda vs. The Procter Gamble |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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