Correlation Between Kinea Rendimentos and Companhia Habitasul

Can any of the company-specific risk be diversified away by investing in both Kinea Rendimentos and Companhia Habitasul 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 Kinea Rendimentos and Companhia Habitasul into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinea Rendimentos Imobilirios and Companhia Habitasul de, you can compare the effects of market volatilities on Kinea Rendimentos and Companhia Habitasul 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 Kinea Rendimentos with a short position of Companhia Habitasul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinea Rendimentos and Companhia Habitasul.

Diversification Opportunities for Kinea Rendimentos and Companhia Habitasul

0.45

Correlation Coefficient

Kinea Rendimentos  Companhia Habitasul

Very weak diversification

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

Pair Corralation between Kinea Rendimentos and Companhia Habitasul

Assuming the 90 days trading horizon Kinea Rendimentos is expected to generate 1.69 times less return on investment than Companhia Habitasul. But when comparing it to its historical volatility, Kinea Rendimentos Imobilirios is 2.41 times less risky than Companhia Habitasul. It trades about 0.03 of its potential returns per unit of risk. Companhia Habitasul de is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,900  in Companhia Habitasul de on September 20, 2024 and sell it today you would lose (50.00) from holding Companhia Habitasul de or give up 1.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	74.04%
Values	Daily Returns

Kinea Rendimentos Imobilirios  vs.  Companhia Habitasul de

Kinea Rendimentos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinea Rendimentos Imobilirios has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Companhia Habitasul

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Companhia Habitasul de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kinea Rendimentos and Companhia Habitasul

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

The idea behind Kinea Rendimentos Imobilirios and Companhia Habitasul 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.