Correlation Between Kinea Oportunidades and Hectare Student

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

By analyzing existing cross correlation between Kinea Oportunidades Real and Hectare Student Housing, you can compare the effects of market volatilities on Kinea Oportunidades and Hectare Student 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 Oportunidades with a short position of Hectare Student. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinea Oportunidades and Hectare Student.

Diversification Opportunities for Kinea Oportunidades and Hectare Student

0.1

Correlation Coefficient

Kinea Oportunidades  Hectare Student

Average diversification

The 3 months correlation between Kinea and Hectare is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Oportunidades Real and Hectare Student Housing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hectare Student Housing and Kinea Oportunidades 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 Oportunidades Real are associated (or correlated) with Hectare Student. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hectare Student Housing has no effect on the direction of Kinea Oportunidades i.e., Kinea Oportunidades and Hectare Student go up and down completely randomly.

Pair Corralation between Kinea Oportunidades and Hectare Student

Assuming the 90 days trading horizon Kinea Oportunidades Real is expected to under-perform the Hectare Student. In addition to that, Kinea Oportunidades is 1.79 times more volatile than Hectare Student Housing. It trades about -0.23 of its total potential returns per unit of risk. Hectare Student Housing is currently generating about -0.11 per unit of volatility. If you would invest  4,911  in Hectare Student Housing on September 5, 2024 and sell it today you would lose (313.00) from holding Hectare Student Housing or give up 6.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Kinea Oportunidades Real  vs.  Hectare Student Housing

Kinea Oportunidades Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinea Oportunidades Real has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic 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.

Hectare Student Housing

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kinea Oportunidades and Hectare Student

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

The idea behind Kinea Oportunidades Real and Hectare Student Housing 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.