Correlation Between Loft II and Guardian Logistica

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Can any of the company-specific risk be diversified away by investing in both Loft II and Guardian Logistica 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 Loft II and Guardian Logistica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loft II Fundo and Guardian Logistica Fundo, you can compare the effects of market volatilities on Loft II and Guardian Logistica 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 Loft II with a short position of Guardian Logistica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loft II and Guardian Logistica.

Diversification Opportunities for Loft II and Guardian Logistica

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Loft and Guardian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Loft II Fundo and Guardian Logistica Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Logistica Fundo and Loft II 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 Loft II Fundo are associated (or correlated) with Guardian Logistica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Logistica Fundo has no effect on the direction of Loft II i.e., Loft II and Guardian Logistica go up and down completely randomly.

Pair Corralation between Loft II and Guardian Logistica

Assuming the 90 days trading horizon Loft II Fundo is expected to under-perform the Guardian Logistica. In addition to that, Loft II is 9.5 times more volatile than Guardian Logistica Fundo. It trades about -0.05 of its total potential returns per unit of risk. Guardian Logistica Fundo is currently generating about 0.03 per unit of volatility. If you would invest  852.00  in Guardian Logistica Fundo on September 26, 2024 and sell it today you would earn a total of  56.00  from holding Guardian Logistica Fundo or generate 6.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

Loft II Fundo  vs.  Guardian Logistica Fundo

 Performance 
       Timeline  
Loft II Fundo 

Risk-Adjusted Performance

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Over the last 90 days Loft II Fundo 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.
Guardian Logistica Fundo 

Risk-Adjusted Performance

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

Loft II and Guardian Logistica Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Loft II and Guardian Logistica

The main advantage of trading using opposite Loft II and Guardian Logistica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loft II position performs unexpectedly, Guardian Logistica 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 Guardian Logistica will offset losses from the drop in Guardian Logistica's long position.
The idea behind Loft II Fundo and Guardian Logistica 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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