Correlation Between NAVI CRDITO and Mxima Renda

Can any of the company-specific risk be diversified away by investing in both NAVI CRDITO and Mxima Renda 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 NAVI CRDITO and Mxima Renda into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NAVI CRDITO IMOBILIRIO and Mxima Renda Corporativa, you can compare the effects of market volatilities on NAVI CRDITO and Mxima Renda 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 NAVI CRDITO with a short position of Mxima Renda. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAVI CRDITO and Mxima Renda.

Diversification Opportunities for NAVI CRDITO and Mxima Renda

0.37

Correlation Coefficient

NAVI CRDITO  Mxima Renda

Weak diversification

The 3 months correlation between NAVI and Mxima is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding NAVI CRDITO IMOBILIRIO and Mxima Renda Corporativa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mxima Renda Corporativa and NAVI CRDITO 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 NAVI CRDITO IMOBILIRIO are associated (or correlated) with Mxima Renda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mxima Renda Corporativa has no effect on the direction of NAVI CRDITO i.e., NAVI CRDITO and Mxima Renda go up and down completely randomly.

Pair Corralation between NAVI CRDITO and Mxima Renda

Assuming the 90 days trading horizon NAVI CRDITO IMOBILIRIO is expected to under-perform the Mxima Renda. But the fund apears to be less risky and, when comparing its historical volatility, NAVI CRDITO IMOBILIRIO is 1.05 times less risky than Mxima Renda. The fund trades about 0.0 of its potential returns per unit of risk. The Mxima Renda Corporativa is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  133.00  in Mxima Renda Corporativa on September 12, 2024 and sell it today you would lose (1.00) from holding Mxima Renda Corporativa or give up 0.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

NAVI CRDITO IMOBILIRIO  vs.  Mxima Renda Corporativa

NAVI CRDITO IMOBILIRIO

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mxima Renda Corporativa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mxima Renda Corporativa 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.

Pair Trading with NAVI CRDITO and Mxima Renda

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

The idea behind NAVI CRDITO IMOBILIRIO and Mxima Renda Corporativa 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.