Correlation Between Benfica and Futebol Clube
Can any of the company-specific risk be diversified away by investing in both Benfica and Futebol Clube 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 Benfica and Futebol Clube into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benfica and Futebol Clube do, you can compare the effects of market volatilities on Benfica and Futebol Clube 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 Benfica with a short position of Futebol Clube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benfica and Futebol Clube.
Diversification Opportunities for Benfica and Futebol Clube
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Benfica and Futebol is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Benfica and Futebol Clube do in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futebol Clube do and Benfica 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 Benfica are associated (or correlated) with Futebol Clube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futebol Clube do has no effect on the direction of Benfica i.e., Benfica and Futebol Clube go up and down completely randomly.
Pair Corralation between Benfica and Futebol Clube
Assuming the 90 days trading horizon Benfica is expected to generate 14.13 times less return on investment than Futebol Clube. But when comparing it to its historical volatility, Benfica is 1.53 times less risky than Futebol Clube. It trades about 0.0 of its potential returns per unit of risk. Futebol Clube do is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Futebol Clube do on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Futebol Clube do or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benfica vs. Futebol Clube do
Performance |
| Timeline |
| Benfica |
| Futebol Clube do |
Benfica and Futebol Clube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benfica and Futebol Clube
The main advantage of trading using opposite Benfica and Futebol Clube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benfica position performs unexpectedly, Futebol Clube 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 Futebol Clube will offset losses from the drop in Futebol Clube's long position.| Benfica vs. Futebol Clube do | Benfica vs. Sporting Clube de | Benfica vs. Martifer SGPS SA | Benfica vs. Corticeira Amorim |
| Futebol Clube vs. Benfica | Futebol Clube vs. Sporting Clube de | Futebol Clube vs. AFC Ajax NV | Futebol Clube vs. CTT Correios 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 Stocks Directory module to find actively traded stocks across global markets.
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