Correlation Between Telefonica Brasil and ProShares

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Can any of the company-specific risk be diversified away by investing in both Telefonica Brasil and ProShares 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 Telefonica Brasil and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonica Brasil SA and ProShares K 1 Free, you can compare the effects of market volatilities on Telefonica Brasil and ProShares 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 Telefonica Brasil with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonica Brasil and ProShares.

Diversification Opportunities for Telefonica Brasil and ProShares

-0.12
  Correlation Coefficient

Good diversification

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

Pair Corralation between Telefonica Brasil and ProShares

Considering the 90-day investment horizon Telefonica Brasil SA is expected to generate 0.95 times more return on investment than ProShares. However, Telefonica Brasil SA is 1.05 times less risky than ProShares. It trades about 0.1 of its potential returns per unit of risk. ProShares K 1 Free is currently generating about 0.03 per unit of risk. If you would invest  829.00  in Telefonica Brasil SA on December 29, 2023 and sell it today you would earn a total of  178.00  from holding Telefonica Brasil SA or generate 21.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Telefonica Brasil SA  vs.  ProShares K-1 Free

 Performance 
       Timeline  
Telefonica Brasil 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Telefonica Brasil SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
ProShares K-1 Free 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in ProShares K 1 Free are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, ProShares disclosed solid returns over the last few months and may actually be approaching a breakup point.

Telefonica Brasil and ProShares Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Telefonica Brasil and ProShares

The main advantage of trading using opposite Telefonica Brasil and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonica Brasil position performs unexpectedly, ProShares 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 ProShares will offset losses from the drop in ProShares' long position.
The idea behind Telefonica Brasil SA and ProShares K 1 Free 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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