Correlation Between Pedra Dourada and ASA METROPOLIS

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

By analyzing existing cross correlation between Pedra Dourada Fundo and ASA METROPOLIS FUNDO, you can compare the effects of market volatilities on Pedra Dourada and ASA METROPOLIS 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 Pedra Dourada with a short position of ASA METROPOLIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pedra Dourada and ASA METROPOLIS.

Diversification Opportunities for Pedra Dourada and ASA METROPOLIS

0.06

Correlation Coefficient

Pedra Dourada  ASA METROPOLIS

Significant diversification

The 3 months correlation between Pedra and ASA is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pedra Dourada Fundo and ASA METROPOLIS FUNDO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASA METROPOLIS FUNDO and Pedra Dourada 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 Pedra Dourada Fundo are associated (or correlated) with ASA METROPOLIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASA METROPOLIS FUNDO has no effect on the direction of Pedra Dourada i.e., Pedra Dourada and ASA METROPOLIS go up and down completely randomly.

Pair Corralation between Pedra Dourada and ASA METROPOLIS

Assuming the 90 days trading horizon Pedra Dourada Fundo is expected to generate 0.1 times more return on investment than ASA METROPOLIS. However, Pedra Dourada Fundo is 10.19 times less risky than ASA METROPOLIS. It trades about 0.09 of its potential returns per unit of risk. ASA METROPOLIS FUNDO is currently generating about -0.09 per unit of risk. If you would invest  3,700  in Pedra Dourada Fundo on April 23, 2025 and sell it today you would earn a total of  224.00  from holding Pedra Dourada Fundo or generate 6.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Pedra Dourada Fundo  vs.  ASA METROPOLIS FUNDO

Pedra Dourada Fundo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pedra Dourada Fundo are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, Pedra Dourada is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ASA METROPOLIS FUNDO

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASA METROPOLIS FUNDO has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's primary indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Pedra Dourada and ASA METROPOLIS

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

The idea behind Pedra Dourada Fundo and ASA METROPOLIS 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 Commodity Directory module to find actively traded commodities issued by global exchanges.