Correlation Between XP Selection and Kinea Hedge
Can any of the company-specific risk be diversified away by investing in both XP Selection and Kinea Hedge 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 XP Selection and Kinea Hedge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XP Selection Fundo and Kinea Hedge Fund, you can compare the effects of market volatilities on XP Selection and Kinea Hedge 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 XP Selection with a short position of Kinea Hedge. Check out your portfolio center. Please also check ongoing floating volatility patterns of XP Selection and Kinea Hedge.
Diversification Opportunities for XP Selection and Kinea Hedge
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between XPSF11 and Kinea is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding XP Selection Fundo and Kinea Hedge Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Hedge Fund and XP Selection 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 XP Selection Fundo are associated (or correlated) with Kinea Hedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Hedge Fund has no effect on the direction of XP Selection i.e., XP Selection and Kinea Hedge go up and down completely randomly.
Pair Corralation between XP Selection and Kinea Hedge
Assuming the 90 days trading horizon XP Selection Fundo is expected to generate 1.11 times more return on investment than Kinea Hedge. However, XP Selection is 1.11 times more volatile than Kinea Hedge Fund. It trades about 0.0 of its potential returns per unit of risk. Kinea Hedge Fund is currently generating about -0.1 per unit of risk. If you would invest 671.00 in XP Selection Fundo on August 30, 2024 and sell it today you would lose (1.00) from holding XP Selection Fundo or give up 0.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
XP Selection Fundo vs. Kinea Hedge Fund
Performance |
| Timeline |
| XP Selection Fundo |
| Kinea Hedge Fund |
XP Selection and Kinea Hedge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XP Selection and Kinea Hedge
The main advantage of trading using opposite XP Selection and Kinea Hedge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XP Selection position performs unexpectedly, Kinea Hedge 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 Kinea Hedge will offset losses from the drop in Kinea Hedge's long position.| XP Selection vs. Energisa SA | XP Selection vs. BTG Pactual Logstica | XP Selection vs. Plano Plano Desenvolvimento | XP Selection vs. The Procter Gamble |
| Kinea Hedge vs. Energisa SA | Kinea Hedge vs. BTG Pactual Logstica | Kinea Hedge vs. Plano Plano Desenvolvimento | Kinea Hedge vs. The Procter Gamble |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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