Correlation Between FDO INV and XP Selection
Can any of the company-specific risk be diversified away by investing in both FDO INV and XP Selection 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 FDO INV and XP Selection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FDO INV IMOB and XP Selection Fundo, you can compare the effects of market volatilities on FDO INV and XP Selection 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 FDO INV with a short position of XP Selection. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDO INV and XP Selection.
Diversification Opportunities for FDO INV and XP Selection
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FDO and XPSF11 is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and XP Selection Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XP Selection Fundo and FDO INV 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 FDO INV IMOB are associated (or correlated) with XP Selection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XP Selection Fundo has no effect on the direction of FDO INV i.e., FDO INV and XP Selection go up and down completely randomly.
Pair Corralation between FDO INV and XP Selection
Assuming the 90 days trading horizon FDO INV IMOB is expected to generate 0.94 times more return on investment than XP Selection. However, FDO INV IMOB is 1.06 times less risky than XP Selection. It trades about 0.15 of its potential returns per unit of risk. XP Selection Fundo is currently generating about -0.17 per unit of risk. If you would invest 128,874 in FDO INV IMOB on September 25, 2024 and sell it today you would earn a total of 15,376 from holding FDO INV IMOB or generate 11.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FDO INV IMOB vs. XP Selection Fundo
Performance |
Timeline |
FDO INV IMOB |
XP Selection Fundo |
FDO INV and XP Selection Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FDO INV and XP Selection
The main advantage of trading using opposite FDO INV and XP Selection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDO INV position performs unexpectedly, XP Selection 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 XP Selection will offset losses from the drop in XP Selection's long position.FDO INV vs. BTG Pactual Logstica | FDO INV vs. Plano Plano Desenvolvimento | FDO INV vs. S1YM34 | FDO INV vs. Cable One |
XP Selection vs. BTG Pactual Logstica | XP Selection vs. Plano Plano Desenvolvimento | XP Selection vs. S1YM34 | XP Selection vs. Cable One |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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