Correlation Between XP Hoteis and WHG REAL

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

By analyzing existing cross correlation between XP Hoteis Fundo and WHG REAL ESTATE, you can compare the effects of market volatilities on XP Hoteis and WHG REAL 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 XP Hoteis with a short position of WHG REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of XP Hoteis and WHG REAL.

Diversification Opportunities for XP Hoteis and WHG REAL

0.0

Correlation Coefficient

XP Hoteis  WHG REAL

Pay attention - limited upside

The 3 months correlation between XPHT11 and WHG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XP Hoteis Fundo and WHG REAL ESTATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHG REAL ESTATE and XP Hoteis 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 XP Hoteis Fundo are associated (or correlated) with WHG REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHG REAL ESTATE has no effect on the direction of XP Hoteis i.e., XP Hoteis and WHG REAL go up and down completely randomly.

Pair Corralation between XP Hoteis and WHG REAL

If you would invest  12,300  in XP Hoteis Fundo on September 30, 2024 and sell it today you would earn a total of  0.00  from holding XP Hoteis Fundo or generate 0.0% return on investment over 90 days.

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

XP Hoteis Fundo  vs.  WHG REAL ESTATE

XP Hoteis Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

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

WHG REAL ESTATE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WHG REAL ESTATE has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with XP Hoteis and WHG REAL

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

The idea behind XP Hoteis Fundo and WHG REAL ESTATE 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.