Correlation Between LESTE FDO and Lupatech
Can any of the company-specific risk be diversified away by investing in both LESTE FDO and Lupatech 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 LESTE FDO and Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LESTE FDO INV and Lupatech SA, you can compare the effects of market volatilities on LESTE FDO and Lupatech 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 LESTE FDO with a short position of Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LESTE FDO and Lupatech.
Diversification Opportunities for LESTE FDO and Lupatech
Weak diversification
The 3 months correlation between LESTE and Lupatech is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding LESTE FDO INV and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA and LESTE FDO 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 LESTE FDO INV are associated (or correlated) with Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of LESTE FDO i.e., LESTE FDO and Lupatech go up and down completely randomly.
Pair Corralation between LESTE FDO and Lupatech
Assuming the 90 days trading horizon LESTE FDO INV is expected to generate 0.5 times more return on investment than Lupatech. However, LESTE FDO INV is 1.99 times less risky than Lupatech. It trades about -0.03 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.05 per unit of risk. If you would invest 8,629 in LESTE FDO INV on September 12, 2024 and sell it today you would lose (1,533) from holding LESTE FDO INV or give up 17.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.8% |
Values | Daily Returns |
LESTE FDO INV vs. Lupatech SA
Performance |
Timeline |
LESTE FDO INV |
Lupatech SA |
LESTE FDO and Lupatech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LESTE FDO and Lupatech
The main advantage of trading using opposite LESTE FDO and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LESTE FDO position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.LESTE FDO vs. FDO INV IMOB | LESTE FDO vs. SUPREMO FUNDO DE | LESTE FDO vs. Real Estate Investment | LESTE FDO vs. NAVI CRDITO IMOBILIRIO |
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Check out your portfolio center.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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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