Correlation Between FUNDO DE and LIFE CAPITAL

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

By analyzing existing cross correlation between FUNDO DE INVESTIMENTO and LIFE CAPITAL PARTNERS, you can compare the effects of market volatilities on FUNDO DE and LIFE CAPITAL 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 FUNDO DE with a short position of LIFE CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUNDO DE and LIFE CAPITAL.

Diversification Opportunities for FUNDO DE and LIFE CAPITAL

-0.45

Correlation Coefficient

FUNDO DE  LIFE CAPITAL

Very good diversification

The 3 months correlation between FUNDO and LIFE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding FUNDO DE INVESTIMENTO and LIFE CAPITAL PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE CAPITAL PARTNERS and FUNDO DE 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 FUNDO DE INVESTIMENTO are associated (or correlated) with LIFE CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE CAPITAL PARTNERS has no effect on the direction of FUNDO DE i.e., FUNDO DE and LIFE CAPITAL go up and down completely randomly.

Pair Corralation between FUNDO DE and LIFE CAPITAL

Assuming the 90 days trading horizon FUNDO DE INVESTIMENTO is expected to under-perform the LIFE CAPITAL. But the fund apears to be less risky and, when comparing its historical volatility, FUNDO DE INVESTIMENTO is 1.33 times less risky than LIFE CAPITAL. The fund trades about -0.11 of its potential returns per unit of risk. The LIFE CAPITAL PARTNERS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  856.00  in LIFE CAPITAL PARTNERS on April 20, 2025 and sell it today you would earn a total of  38.00  from holding LIFE CAPITAL PARTNERS or generate 4.44% return on investment over 90 days.

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

FUNDO DE INVESTIMENTO  vs.  LIFE CAPITAL PARTNERS

FUNDO DE INVESTIMENTO

Risk-Adjusted Performance

Very Weak

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

LIFE CAPITAL PARTNERS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LIFE CAPITAL PARTNERS are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, LIFE CAPITAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FUNDO DE and LIFE CAPITAL

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

The idea behind FUNDO DE INVESTIMENTO and LIFE CAPITAL PARTNERS 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.