Correlation Between IRIDIUM FUNDO and JFL Living

Can any of the company-specific risk be diversified away by investing in both IRIDIUM FUNDO and JFL Living 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 IRIDIUM FUNDO and JFL Living into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IRIDIUM FUNDO DE and JFL Living Fundo, you can compare the effects of market volatilities on IRIDIUM FUNDO and JFL Living 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 IRIDIUM FUNDO with a short position of JFL Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRIDIUM FUNDO and JFL Living.

Diversification Opportunities for IRIDIUM FUNDO and JFL Living

-0.45

Correlation Coefficient

IRIDIUM FUNDO  JFL Living

Very good diversification

The 3 months correlation between IRIDIUM and JFL is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding IRIDIUM FUNDO DE and JFL Living Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JFL Living Fundo and IRIDIUM FUNDO 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 IRIDIUM FUNDO DE are associated (or correlated) with JFL Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JFL Living Fundo has no effect on the direction of IRIDIUM FUNDO i.e., IRIDIUM FUNDO and JFL Living go up and down completely randomly.

Pair Corralation between IRIDIUM FUNDO and JFL Living

Assuming the 90 days trading horizon IRIDIUM FUNDO DE is expected to under-perform the JFL Living. In addition to that, IRIDIUM FUNDO is 1.16 times more volatile than JFL Living Fundo. It trades about -0.24 of its total potential returns per unit of risk. JFL Living Fundo is currently generating about 0.08 per unit of volatility. If you would invest  6,893  in JFL Living Fundo on September 20, 2024 and sell it today you would earn a total of  350.00  from holding JFL Living Fundo or generate 5.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

IRIDIUM FUNDO DE  vs.  JFL Living Fundo

IRIDIUM FUNDO DE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IRIDIUM 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 forward 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.

JFL Living Fundo

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JFL Living Fundo are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, JFL Living is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IRIDIUM FUNDO and JFL Living

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

The idea behind IRIDIUM FUNDO DE and JFL Living Fundo 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.