Correlation Between Aesapar Fundo and Bombril SA

Can any of the company-specific risk be diversified away by investing in both Aesapar Fundo and Bombril SA 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 Aesapar Fundo and Bombril SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aesapar Fundo de and Bombril SA, you can compare the effects of market volatilities on Aesapar Fundo and Bombril SA 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 Aesapar Fundo with a short position of Bombril SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aesapar Fundo and Bombril SA.

Diversification Opportunities for Aesapar Fundo and Bombril SA

-0.38

Correlation Coefficient

Aesapar Fundo  Bombril SA

Very good diversification

The 3 months correlation between Aesapar and Bombril is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aesapar Fundo de and Bombril SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bombril SA and Aesapar Fundo 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 Aesapar Fundo de are associated (or correlated) with Bombril SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bombril SA has no effect on the direction of Aesapar Fundo i.e., Aesapar Fundo and Bombril SA go up and down completely randomly.

Pair Corralation between Aesapar Fundo and Bombril SA

Assuming the 90 days trading horizon Aesapar Fundo de is expected to under-perform the Bombril SA. But the fund apears to be less risky and, when comparing its historical volatility, Aesapar Fundo de is 1.88 times less risky than Bombril SA. The fund trades about -0.23 of its potential returns per unit of risk. The Bombril SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  209.00  in Bombril SA on September 1, 2024 and sell it today you would earn a total of  8.00  from holding Bombril SA or generate 3.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aesapar Fundo de  vs.  Bombril SA

Aesapar Fundo de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aesapar Fundo de has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the fund investors.

Bombril SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bombril SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bombril SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aesapar Fundo and Bombril SA

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

The idea behind Aesapar Fundo de and Bombril SA 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.