Correlation Between Fundo Investimento and FDO INV
Can any of the company-specific risk be diversified away by investing in both Fundo Investimento and FDO INV 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 FDO INV 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 FDO INV IMOB, you can compare the effects of market volatilities on Fundo Investimento and FDO INV 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 FDO INV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundo Investimento and FDO INV.
Diversification Opportunities for Fundo Investimento and FDO INV
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fundo and FDO is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fundo Investimento Imobiliario and FDO INV IMOB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDO INV IMOB 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 FDO INV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDO INV IMOB has no effect on the direction of Fundo Investimento i.e., Fundo Investimento and FDO INV go up and down completely randomly.
Pair Corralation between Fundo Investimento and FDO INV
Assuming the 90 days trading horizon Fundo Investimento Imobiliario is expected to generate 8.77 times more return on investment than FDO INV. However, Fundo Investimento is 8.77 times more volatile than FDO INV IMOB. It trades about 0.15 of its potential returns per unit of risk. FDO INV IMOB is currently generating about 0.24 per unit of risk. If you would invest 8,196 in Fundo Investimento Imobiliario on October 21, 2024 and sell it today you would earn a total of 254.00 from holding Fundo Investimento Imobiliario or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundo Investimento Imobiliario vs. FDO INV IMOB
Performance |
| Timeline |
| Fundo Investimento |
| FDO INV IMOB |
Fundo Investimento and FDO INV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundo Investimento and FDO INV
The main advantage of trading using opposite Fundo Investimento and FDO INV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundo Investimento position performs unexpectedly, FDO INV 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 FDO INV will offset losses from the drop in FDO INV's long position.| Fundo Investimento vs. BTG Pactual Logstica | Fundo Investimento vs. Btg Pactual Real | Fundo Investimento vs. KILIMA VOLKANO RECEBVEIS | Fundo Investimento vs. DEVANT PROPERTIES FUNDO |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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