Correlation Between Fundo Investimento and British American
Can any of the company-specific risk be diversified away by investing in both Fundo Investimento and British American 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 Fundo Investimento and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundo Investimento Imobiliario and British American Tobacco, you can compare the effects of market volatilities on Fundo Investimento and British American 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 Fundo Investimento with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundo Investimento and British American.
Diversification Opportunities for Fundo Investimento and British American
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fundo and British is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fundo Investimento Imobiliario and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and Fundo Investimento 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 Fundo Investimento Imobiliario are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Fundo Investimento i.e., Fundo Investimento and British American go up and down completely randomly.
Pair Corralation between Fundo Investimento and British American
Assuming the 90 days trading horizon Fundo Investimento Imobiliario is expected to under-perform the British American. But the fund apears to be less risky and, when comparing its historical volatility, Fundo Investimento Imobiliario is 1.93 times less risky than British American. The fund trades about -0.12 of its potential returns per unit of risk. The British American Tobacco is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,203 in British American Tobacco on September 3, 2024 and sell it today you would earn a total of 364.00 from holding British American Tobacco or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundo Investimento Imobiliario vs. British American Tobacco
Performance |
| Timeline |
| Fundo Investimento |
| British American Tobacco |
Fundo Investimento and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundo Investimento and British American
The main advantage of trading using opposite Fundo Investimento and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundo Investimento position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Fundo Investimento vs. BTG Pactual Logstica | Fundo Investimento vs. KILIMA VOLKANO RECEBVEIS | Fundo Investimento vs. DEVANT PROPERTIES FUNDO | Fundo Investimento vs. SPARTA FIAGRO FDO |
| British American vs. Fundo Investimento Imobiliario | British American vs. Fras le SA | British American vs. Western Digital | British American vs. Clave Indices 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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