Correlation Between KILIMA VOLKANO and Galapagos Recebiveis

Can any of the company-specific risk be diversified away by investing in both KILIMA VOLKANO and Galapagos Recebiveis 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 Galapagos Recebiveis 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 Galapagos Recebiveis Imobiliarios, you can compare the effects of market volatilities on KILIMA VOLKANO and Galapagos Recebiveis 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 Galapagos Recebiveis. Check out your portfolio center. Please also check ongoing floating volatility patterns of KILIMA VOLKANO and Galapagos Recebiveis.

Diversification Opportunities for KILIMA VOLKANO and Galapagos Recebiveis

0.83

Correlation Coefficient

KILIMA VOLKANO  Galapagos Recebiveis

Very poor diversification

The 3 months correlation between KILIMA and Galapagos is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding KILIMA VOLKANO RECEBVEIS and Galapagos Recebiveis Imobiliar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galapagos Recebiveis 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 Galapagos Recebiveis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galapagos Recebiveis has no effect on the direction of KILIMA VOLKANO i.e., KILIMA VOLKANO and Galapagos Recebiveis go up and down completely randomly.

Pair Corralation between KILIMA VOLKANO and Galapagos Recebiveis

Assuming the 90 days trading horizon KILIMA VOLKANO RECEBVEIS is expected to generate 1.06 times more return on investment than Galapagos Recebiveis. However, KILIMA VOLKANO is 1.06 times more volatile than Galapagos Recebiveis Imobiliarios. It trades about 0.14 of its potential returns per unit of risk. Galapagos Recebiveis Imobiliarios is currently generating about 0.14 per unit of risk. If you would invest  6,797  in KILIMA VOLKANO RECEBVEIS on April 24, 2025 and sell it today you would earn a total of  175.00  from holding KILIMA VOLKANO RECEBVEIS or generate 2.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.65%
Values	Daily Returns

KILIMA VOLKANO RECEBVEIS  vs.  Galapagos Recebiveis Imobiliar

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 16 (%) 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.

Galapagos Recebiveis

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Galapagos Recebiveis Imobiliarios are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Galapagos Recebiveis may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with KILIMA VOLKANO and Galapagos Recebiveis

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

The idea behind KILIMA VOLKANO RECEBVEIS and Galapagos Recebiveis Imobiliarios 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.