Correlation Between BB Seguridade and Fundamental Global

Can any of the company-specific risk be diversified away by investing in both BB Seguridade and Fundamental Global 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 BB Seguridade and Fundamental Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BB Seguridade Participacoes and Fundamental Global, you can compare the effects of market volatilities on BB Seguridade and Fundamental Global 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 BB Seguridade with a short position of Fundamental Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Seguridade and Fundamental Global.

Diversification Opportunities for BB Seguridade and Fundamental Global

-0.51

Correlation Coefficient

BB Seguridade  Fundamental Global

Excellent diversification

The 3 months correlation between BBSEY and Fundamental is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding BB Seguridade Participacoes and Fundamental Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Global and BB Seguridade 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 BB Seguridade Participacoes are associated (or correlated) with Fundamental Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Global has no effect on the direction of BB Seguridade i.e., BB Seguridade and Fundamental Global go up and down completely randomly.

Pair Corralation between BB Seguridade and Fundamental Global

Assuming the 90 days horizon BB Seguridade Participacoes is expected to under-perform the Fundamental Global. But the pink sheet apears to be less risky and, when comparing its historical volatility, BB Seguridade Participacoes is 7.22 times less risky than Fundamental Global. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Fundamental Global is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,675  in Fundamental Global on May 10, 2025 and sell it today you would earn a total of  1,942  from holding Fundamental Global or generate 115.94% return on investment over 90 days.

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

BB Seguridade Participacoes  vs.  Fundamental Global

BB Seguridade Partic

Risk-Adjusted Performance

Weakest

Over the last 90 days BB Seguridade Participacoes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, BB Seguridade is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fundamental Global

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamental Global are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Fundamental Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BB Seguridade and Fundamental Global

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

The idea behind BB Seguridade Participacoes and Fundamental Global 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.