Correlation Between Hectare Student and FDO INV

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

By analyzing existing cross correlation between Hectare Student Housing and FDO INV IMOB, you can compare the effects of market volatilities on Hectare Student and FDO INV 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 Hectare Student with a short position of FDO INV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hectare Student and FDO INV.

Diversification Opportunities for Hectare Student and FDO INV

0.12

Correlation Coefficient

Hectare Student  FDO INV

Average diversification

The 3 months correlation between Hectare and FDO is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hectare Student Housing and FDO INV IMOB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDO INV IMOB and Hectare Student 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 Hectare Student Housing are associated (or correlated) with FDO INV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDO INV IMOB has no effect on the direction of Hectare Student i.e., Hectare Student and FDO INV go up and down completely randomly.

Pair Corralation between Hectare Student and FDO INV

Assuming the 90 days trading horizon Hectare Student Housing is expected to generate 33.72 times more return on investment than FDO INV. However, Hectare Student is 33.72 times more volatile than FDO INV IMOB. It trades about 0.13 of its potential returns per unit of risk. FDO INV IMOB is currently generating about 0.0 per unit of risk. If you would invest  4,944  in Hectare Student Housing on April 25, 2025 and sell it today you would earn a total of  2,106  from holding Hectare Student Housing or generate 42.6% return on investment over 90 days.

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

Hectare Student Housing  vs.  FDO INV IMOB

Hectare Student Housing

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hectare Student Housing are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Hectare Student sustained solid returns over the last few months and may actually be approaching a breakup point.

FDO INV IMOB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Hectare Student and FDO INV

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

The idea behind Hectare Student Housing and FDO INV IMOB 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 Anywhere module to track or share privately all of your investments from the convenience of any device.