Correlation Between XP Selection and Fundo Investimento
Can any of the company-specific risk be diversified away by investing in both XP Selection and Fundo Investimento 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 Fundo Investimento 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 Fundo Investimento Imobiliario, you can compare the effects of market volatilities on XP Selection and Fundo Investimento 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 Fundo Investimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of XP Selection and Fundo Investimento.
Diversification Opportunities for XP Selection and Fundo Investimento
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between XPSF11 and Fundo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding XP Selection Fundo and Fundo Investimento Imobiliario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundo Investimento 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 Fundo Investimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundo Investimento has no effect on the direction of XP Selection i.e., XP Selection and Fundo Investimento go up and down completely randomly.
Pair Corralation between XP Selection and Fundo Investimento
Assuming the 90 days trading horizon XP Selection Fundo is expected to under-perform the Fundo Investimento. But the fund apears to be less risky and, when comparing its historical volatility, XP Selection Fundo is 1.05 times less risky than Fundo Investimento. The fund trades about -0.01 of its potential returns per unit of risk. The Fundo Investimento Imobiliario is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,894 in Fundo Investimento Imobiliario on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Fundo Investimento Imobiliario or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
XP Selection Fundo vs. Fundo Investimento Imobiliario
Performance |
| Timeline |
| XP Selection Fundo |
| Fundo Investimento |
XP Selection and Fundo Investimento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XP Selection and Fundo Investimento
The main advantage of trading using opposite XP Selection and Fundo Investimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XP Selection position performs unexpectedly, Fundo Investimento 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 Fundo Investimento will offset losses from the drop in Fundo Investimento's long position.| XP Selection vs. BTG Pactual Logstica | XP Selection vs. Plano Plano Desenvolvimento | XP Selection vs. Companhia Habitasul de | XP Selection vs. FDO INV IMOB |
| Fundo Investimento vs. JFL Living Fundo | Fundo Investimento vs. Maxi Renda Fundo | Fundo Investimento vs. Ourinvest Jpp Fundo | Fundo Investimento vs. Tordesilhas Ei 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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