Correlation Between Hedge Realty and Hedge Aaa

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

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

Diversification Opportunities for Hedge Realty and Hedge Aaa

0.1

Correlation Coefficient

Hedge Realty  Hedge Aaa

Average diversification

The 3 months correlation between Hedge and Hedge is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hedge Realty Development and Hedge Aaa Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedge Aaa Fundo and Hedge Realty 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 Hedge Realty Development are associated (or correlated) with Hedge Aaa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedge Aaa Fundo has no effect on the direction of Hedge Realty i.e., Hedge Realty and Hedge Aaa go up and down completely randomly.

Pair Corralation between Hedge Realty and Hedge Aaa

Assuming the 90 days trading horizon Hedge Realty Development is expected to generate 14.89 times more return on investment than Hedge Aaa. However, Hedge Realty is 14.89 times more volatile than Hedge Aaa Fundo. It trades about 0.06 of its potential returns per unit of risk. Hedge Aaa Fundo is currently generating about -0.07 per unit of risk. If you would invest  430.00  in Hedge Realty Development on September 2, 2024 and sell it today you would lose (70.00) from holding Hedge Realty Development or give up 16.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.76%
Values	Daily Returns

Hedge Realty Development  vs.  Hedge Aaa Fundo

Hedge Realty Development

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hedge Realty Development are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak fundamental indicators, Hedge Realty sustained solid returns over the last few months and may actually be approaching a breakup point.

Hedge Aaa Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hedge Realty and Hedge Aaa

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

The idea behind Hedge Realty Development and Hedge Aaa Fundo 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.