Correlation Between Cable One and Aesapar Fundo

Can any of the company-specific risk be diversified away by investing in both Cable One and Aesapar Fundo 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 Cable One and Aesapar Fundo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cable One and Aesapar Fundo de, you can compare the effects of market volatilities on Cable One and Aesapar Fundo 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 Cable One with a short position of Aesapar Fundo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Aesapar Fundo.

Diversification Opportunities for Cable One and Aesapar Fundo

-0.83

Correlation Coefficient

Cable One  Aesapar Fundo

Pay attention - limited upside

The 3 months correlation between Cable and Aesapar is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Aesapar Fundo de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesapar Fundo de and Cable One 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 Cable One are associated (or correlated) with Aesapar Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesapar Fundo de has no effect on the direction of Cable One i.e., Cable One and Aesapar Fundo go up and down completely randomly.

Pair Corralation between Cable One and Aesapar Fundo

Assuming the 90 days trading horizon Cable One is expected to generate 0.88 times more return on investment than Aesapar Fundo. However, Cable One is 1.14 times less risky than Aesapar Fundo. It trades about 0.23 of its potential returns per unit of risk. Aesapar Fundo de is currently generating about -0.23 per unit of risk. If you would invest  970.00  in Cable One on September 23, 2024 and sell it today you would earn a total of  185.00  from holding Cable One or generate 19.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	97.62%
Values	Daily Returns

Cable One  vs.  Aesapar Fundo de

Cable One

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cable One are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cable One sustained solid returns over the last few months and may actually be approaching a breakup point.

Aesapar Fundo de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aesapar Fundo de has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Cable One and Aesapar Fundo

The main advantage of trading using opposite Cable One and Aesapar Fundo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Aesapar Fundo 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 Aesapar Fundo will offset losses from the drop in Aesapar Fundo's long position.

The idea behind Cable One and Aesapar Fundo de pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.