Correlation Between Telefonica Brasil and ProShares
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Telefonica Brasil SA vs. ProShares K-1 Free
Performance |
Timeline |
Telefonica Brasil |
ProShares K-1 Free |
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.Telefonica Brasil vs. Saia Inc | Telefonica Brasil vs. Cheniere Energy Partners | Telefonica Brasil vs. JD Sports Fashion | Telefonica Brasil vs. Yuexiu Transport Infrastructure |
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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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