Correlation Between Legatus Shoppings and FDO INV

Can any of the company-specific risk be diversified away by investing in both Legatus Shoppings and FDO INV 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 Legatus Shoppings and FDO INV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Legatus Shoppings Fundo and FDO INV IMOB, you can compare the effects of market volatilities on Legatus Shoppings and FDO INV 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 Legatus Shoppings with a short position of FDO INV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legatus Shoppings and FDO INV.

Diversification Opportunities for Legatus Shoppings and FDO INV

0.33

Correlation Coefficient

Legatus Shoppings  FDO INV

Weak diversification

The 3 months correlation between Legatus and FDO is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Legatus Shoppings Fundo and FDO INV IMOB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDO INV IMOB and Legatus Shoppings 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 Legatus Shoppings Fundo are associated (or correlated) with FDO INV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDO INV IMOB has no effect on the direction of Legatus Shoppings i.e., Legatus Shoppings and FDO INV go up and down completely randomly.

Pair Corralation between Legatus Shoppings and FDO INV

Assuming the 90 days trading horizon Legatus Shoppings Fundo is expected to under-perform the FDO INV. But the fund apears to be less risky and, when comparing its historical volatility, Legatus Shoppings Fundo is 3.49 times less risky than FDO INV. The fund trades about -0.01 of its potential returns per unit of risk. The FDO INV IMOB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  138,282  in FDO INV IMOB on September 13, 2024 and sell it today you would earn a total of  6,718  from holding FDO INV IMOB or generate 4.86% return on investment over 90 days.

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

Legatus Shoppings Fundo  vs.  FDO INV IMOB

Legatus Shoppings Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Legatus Shoppings Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Legatus Shoppings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

FDO INV IMOB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FDO INV IMOB are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, FDO INV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Legatus Shoppings and FDO INV

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

The idea behind Legatus Shoppings Fundo and FDO INV IMOB 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.