Correlation Between CM Hospitalar and FDO INV
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar 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 CM Hospitalar and FDO INV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM Hospitalar SA and FDO INV IMOB, you can compare the effects of market volatilities on CM Hospitalar 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 CM Hospitalar with a short position of FDO INV. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and FDO INV.
Diversification Opportunities for CM Hospitalar and FDO INV
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VVEO3 and FDO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA 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 CM Hospitalar 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 CM Hospitalar SA 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 CM Hospitalar i.e., CM Hospitalar and FDO INV go up and down completely randomly.
Pair Corralation between CM Hospitalar and FDO INV
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the FDO INV. But the stock apears to be less risky and, when comparing its historical volatility, CM Hospitalar SA is 16.14 times less risky than FDO INV. The stock trades about -0.1 of its potential returns per unit of risk. The FDO INV IMOB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 19.00 in FDO INV IMOB on October 25, 2024 and sell it today you would earn a total of 144,231 from holding FDO INV IMOB or generate 759110.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 53.92% |
| Values | Daily Returns |
CM Hospitalar SA vs. FDO INV IMOB
Performance |
| Timeline |
| CM Hospitalar SA |
| FDO INV IMOB |
CM Hospitalar and FDO INV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and FDO INV
The main advantage of trading using opposite CM Hospitalar and FDO INV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar 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.| CM Hospitalar vs. Profarma Distribuidora de | CM Hospitalar vs. Datadog, | CM Hospitalar vs. Energisa SA | CM Hospitalar vs. BTG Pactual Logstica |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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