Correlation Between SPARTA FIAGRO and Caixa Rio

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

By analyzing existing cross correlation between SPARTA FIAGRO FDO and Caixa Rio Bravo, you can compare the effects of market volatilities on SPARTA FIAGRO and Caixa Rio 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 SPARTA FIAGRO with a short position of Caixa Rio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTA FIAGRO and Caixa Rio.

Diversification Opportunities for SPARTA FIAGRO and Caixa Rio

-0.4

Correlation Coefficient

SPARTA FIAGRO  Caixa Rio

Very good diversification

The 3 months correlation between SPARTA and Caixa is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SPARTA FIAGRO FDO and Caixa Rio Bravo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixa Rio Bravo and SPARTA FIAGRO 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 SPARTA FIAGRO FDO are associated (or correlated) with Caixa Rio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixa Rio Bravo has no effect on the direction of SPARTA FIAGRO i.e., SPARTA FIAGRO and Caixa Rio go up and down completely randomly.

Pair Corralation between SPARTA FIAGRO and Caixa Rio

Assuming the 90 days trading horizon SPARTA FIAGRO FDO is expected to generate 0.21 times more return on investment than Caixa Rio. However, SPARTA FIAGRO FDO is 4.8 times less risky than Caixa Rio. It trades about 0.21 of its potential returns per unit of risk. Caixa Rio Bravo is currently generating about -0.02 per unit of risk. If you would invest  8,861  in SPARTA FIAGRO FDO on April 22, 2025 and sell it today you would earn a total of  690.00  from holding SPARTA FIAGRO FDO or generate 7.79% return on investment over 90 days.

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

SPARTA FIAGRO FDO  vs.  Caixa Rio Bravo

SPARTA FIAGRO FDO

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPARTA FIAGRO FDO are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, SPARTA FIAGRO may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Caixa Rio Bravo

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SPARTA FIAGRO and Caixa Rio

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

The idea behind SPARTA FIAGRO FDO and Caixa Rio Bravo 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.