Correlation Between S1YM34 and NAVI CRDITO

Can any of the company-specific risk be diversified away by investing in both S1YM34 and NAVI CRDITO 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 S1YM34 and NAVI CRDITO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between S1YM34 and NAVI CRDITO IMOBILIRIO, you can compare the effects of market volatilities on S1YM34 and NAVI CRDITO 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 S1YM34 with a short position of NAVI CRDITO. Check out your portfolio center. Please also check ongoing floating volatility patterns of S1YM34 and NAVI CRDITO.

Diversification Opportunities for S1YM34 and NAVI CRDITO

-0.74

Correlation Coefficient

S1YM34  NAVI CRDITO

Pay attention - limited upside

The 3 months correlation between S1YM34 and NAVI is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding S1YM34 and NAVI CRDITO IMOBILIRIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAVI CRDITO IMOBILIRIO and S1YM34 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 S1YM34 are associated (or correlated) with NAVI CRDITO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAVI CRDITO IMOBILIRIO has no effect on the direction of S1YM34 i.e., S1YM34 and NAVI CRDITO go up and down completely randomly.

Pair Corralation between S1YM34 and NAVI CRDITO

Assuming the 90 days trading horizon S1YM34 is expected to generate 0.05 times more return on investment than NAVI CRDITO. However, S1YM34 is 19.12 times less risky than NAVI CRDITO. It trades about 0.22 of its potential returns per unit of risk. NAVI CRDITO IMOBILIRIO is currently generating about 0.01 per unit of risk. If you would invest  17,800  in S1YM34 on September 29, 2024 and sell it today you would earn a total of  93.00  from holding S1YM34 or generate 0.52% return on investment over 90 days.

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

S1YM34  vs.  NAVI CRDITO IMOBILIRIO

S1YM34

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in S1YM34 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, S1YM34 sustained solid returns over the last few months and may actually be approaching a breakup point.

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 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 S1YM34 and NAVI CRDITO

The main advantage of trading using opposite S1YM34 and NAVI CRDITO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S1YM34 position performs unexpectedly, NAVI CRDITO 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 NAVI CRDITO will offset losses from the drop in NAVI CRDITO's long position.

The idea behind S1YM34 and NAVI CRDITO IMOBILIRIO 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.