Correlation Between IShares BMFBovespa and Xp Credito
Can any of the company-specific risk be diversified away by investing in both IShares BMFBovespa and Xp Credito 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 IShares BMFBovespa and Xp Credito into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares BMFBovespa Small and Xp Credito Agricola, you can compare the effects of market volatilities on IShares BMFBovespa and Xp Credito 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 IShares BMFBovespa with a short position of Xp Credito. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares BMFBovespa and Xp Credito.
Diversification Opportunities for IShares BMFBovespa and Xp Credito
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and XPCA11 is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding iShares BMFBovespa Small and Xp Credito Agricola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Credito Agricola and IShares BMFBovespa 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 iShares BMFBovespa Small are associated (or correlated) with Xp Credito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Credito Agricola has no effect on the direction of IShares BMFBovespa i.e., IShares BMFBovespa and Xp Credito go up and down completely randomly.
Pair Corralation between IShares BMFBovespa and Xp Credito
Assuming the 90 days trading horizon iShares BMFBovespa Small is expected to generate 1.33 times more return on investment than Xp Credito. However, IShares BMFBovespa is 1.33 times more volatile than Xp Credito Agricola. It trades about 0.01 of its potential returns per unit of risk. Xp Credito Agricola is currently generating about -0.07 per unit of risk. If you would invest 9,230 in iShares BMFBovespa Small on August 30, 2024 and sell it today you would earn a total of 371.00 from holding iShares BMFBovespa Small or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
iShares BMFBovespa Small vs. Xp Credito Agricola
Performance |
| Timeline |
| iShares BMFBovespa Small |
| Xp Credito Agricola |
IShares BMFBovespa and Xp Credito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares BMFBovespa and Xp Credito
The main advantage of trading using opposite IShares BMFBovespa and Xp Credito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares BMFBovespa position performs unexpectedly, Xp Credito 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 Xp Credito will offset losses from the drop in Xp Credito's long position.| IShares BMFBovespa vs. Energisa SA | IShares BMFBovespa vs. BTG Pactual Logstica | IShares BMFBovespa vs. Plano Plano Desenvolvimento | IShares BMFBovespa vs. The Procter Gamble |
| Xp Credito vs. RB Capital Office | Xp Credito vs. Ishares Msci Brazil | Xp Credito vs. Investo Etf Global | Xp Credito vs. iShares BMFBovespa Small |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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