Correlation Between Aesapar Fundo and HALI34

Can any of the company-specific risk be diversified away by investing in both Aesapar Fundo and HALI34 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 HALI34 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 HALI34, you can compare the effects of market volatilities on Aesapar Fundo and HALI34 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 HALI34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aesapar Fundo and HALI34.

Diversification Opportunities for Aesapar Fundo and HALI34

-0.85

Correlation Coefficient

Aesapar Fundo  HALI34

Pay attention - limited upside

The 3 months correlation between Aesapar and HALI34 is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aesapar Fundo de and HALI34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HALI34 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 HALI34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HALI34 has no effect on the direction of Aesapar Fundo i.e., Aesapar Fundo and HALI34 go up and down completely randomly.

Pair Corralation between Aesapar Fundo and HALI34

Assuming the 90 days trading horizon Aesapar Fundo de is expected to under-perform the HALI34. But the fund apears to be less risky and, when comparing its historical volatility, Aesapar Fundo de is 1.61 times less risky than HALI34. The fund trades about -0.17 of its potential returns per unit of risk. The HALI34 is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  16,422  in HALI34 on September 22, 2024 and sell it today you would lose (646.00) from holding HALI34 or give up 3.93% of portfolio value over 90 days.

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

Aesapar Fundo de  vs.  HALI34

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 January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

HALI34

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HALI34 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, HALI34 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aesapar Fundo and HALI34

The main advantage of trading using opposite Aesapar Fundo and HALI34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aesapar Fundo position performs unexpectedly, HALI34 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 HALI34 will offset losses from the drop in HALI34's long position.

The idea behind Aesapar Fundo de and HALI34 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.