Correlation Between KILIMA VOLKANO and BICE11

Can any of the company-specific risk be diversified away by investing in both KILIMA VOLKANO and BICE11 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 KILIMA VOLKANO and BICE11 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KILIMA VOLKANO RECEBVEIS and BICE11, you can compare the effects of market volatilities on KILIMA VOLKANO and BICE11 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 KILIMA VOLKANO with a short position of BICE11. Check out your portfolio center. Please also check ongoing floating volatility patterns of KILIMA VOLKANO and BICE11.

Diversification Opportunities for KILIMA VOLKANO and BICE11

0.9

Correlation Coefficient

KILIMA VOLKANO  BICE11

Almost no diversification

The 3 months correlation between KILIMA and BICE11 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding KILIMA VOLKANO RECEBVEIS and BICE11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BICE11 and KILIMA VOLKANO 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 KILIMA VOLKANO RECEBVEIS are associated (or correlated) with BICE11. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BICE11 has no effect on the direction of KILIMA VOLKANO i.e., KILIMA VOLKANO and BICE11 go up and down completely randomly.

Pair Corralation between KILIMA VOLKANO and BICE11

Assuming the 90 days trading horizon KILIMA VOLKANO RECEBVEIS is expected to generate 9.33 times more return on investment than BICE11. However, KILIMA VOLKANO is 9.33 times more volatile than BICE11. It trades about 0.23 of its potential returns per unit of risk. BICE11 is currently generating about 0.24 per unit of risk. If you would invest  6,101  in KILIMA VOLKANO RECEBVEIS on April 20, 2025 and sell it today you would earn a total of  934.00  from holding KILIMA VOLKANO RECEBVEIS or generate 15.31% return on investment over 90 days.

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

KILIMA VOLKANO RECEBVEIS  vs.  BICE11

KILIMA VOLKANO RECEBVEIS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KILIMA VOLKANO RECEBVEIS are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, KILIMA VOLKANO sustained solid returns over the last few months and may actually be approaching a breakup point.

BICE11

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BICE11 are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental indicators, BICE11 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KILIMA VOLKANO and BICE11

The main advantage of trading using opposite KILIMA VOLKANO and BICE11 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KILIMA VOLKANO position performs unexpectedly, BICE11 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 BICE11 will offset losses from the drop in BICE11's long position.

The idea behind KILIMA VOLKANO RECEBVEIS and BICE11 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.