Correlation Between Legatus Shoppings and FUNDO DE

Can any of the company-specific risk be diversified away by investing in both Legatus Shoppings and FUNDO DE 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 FUNDO DE 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 FUNDO DE INVESTIMENTO, you can compare the effects of market volatilities on Legatus Shoppings and FUNDO DE 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 FUNDO DE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legatus Shoppings and FUNDO DE.

Diversification Opportunities for Legatus Shoppings and FUNDO DE

0.58

Correlation Coefficient

Legatus Shoppings  FUNDO DE

Very weak diversification

The 3 months correlation between Legatus and FUNDO is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Legatus Shoppings Fundo and FUNDO DE INVESTIMENTO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUNDO DE INVESTIMENTO 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 FUNDO DE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUNDO DE INVESTIMENTO has no effect on the direction of Legatus Shoppings i.e., Legatus Shoppings and FUNDO DE go up and down completely randomly.

Pair Corralation between Legatus Shoppings and FUNDO DE

Assuming the 90 days trading horizon Legatus Shoppings Fundo is expected to generate 0.36 times more return on investment than FUNDO DE. However, Legatus Shoppings Fundo is 2.81 times less risky than FUNDO DE. It trades about -0.07 of its potential returns per unit of risk. FUNDO DE INVESTIMENTO is currently generating about -0.05 per unit of risk. If you would invest  11,200  in Legatus Shoppings Fundo on September 4, 2024 and sell it today you would lose (200.00) from holding Legatus Shoppings Fundo or give up 1.79% of portfolio value over 90 days.

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

Legatus Shoppings Fundo  vs.  FUNDO DE INVESTIMENTO

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.

FUNDO DE INVESTIMENTO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FUNDO DE INVESTIMENTO has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, FUNDO DE 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 FUNDO DE

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

The idea behind Legatus Shoppings Fundo and FUNDO DE INVESTIMENTO 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.