SUPREMO FUNDO (Brazil) Volatility

SUPREMO FUNDO DE Fund Volatility Analysis

SUPREMO FUNDO Projected Return Density Against Market

Assuming the 90 days trading horizon SUPREMO FUNDO has a beta that is very close to zero . This usually implies the returns on DOW JONES INDUSTRIAL and SUPREMO FUNDO do not appear to be sensitive. It does not look like SUPREMO FUNDO's alpha can have any bearing on the current valuation. SUPREMO FUNDO's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how supremo fund's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a SUPREMO FUNDO Price Volatility?

Several factors can influence a fund's market volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

SUPREMO FUNDO Fund Return Volatility

SUPREMO FUNDO historical daily return volatility represents how much of SUPREMO FUNDO fund's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The fund accepts 0.0% volatility on return distribution over the 90 days horizon. By contrast, Dow Jones Industrial accepts 0.7313% volatility on return distribution over the 90 days horizon.

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.

The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against SUPREMO FUNDO as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. SUPREMO FUNDO's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, SUPREMO FUNDO's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to SUPREMO FUNDO DE.