Correlation Between ACS Actividades and Mapfre
Can any of the company-specific risk be diversified away by investing in both ACS Actividades and Mapfre 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 ACS Actividades and Mapfre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACS Actividades de and Mapfre, you can compare the effects of market volatilities on ACS Actividades and Mapfre 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 ACS Actividades with a short position of Mapfre. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACS Actividades and Mapfre.
Diversification Opportunities for ACS Actividades and Mapfre
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ACS and Mapfre is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades de and Mapfre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre and ACS Actividades 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 ACS Actividades de are associated (or correlated) with Mapfre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre has no effect on the direction of ACS Actividades i.e., ACS Actividades and Mapfre go up and down completely randomly.
Pair Corralation between ACS Actividades and Mapfre
Assuming the 90 days trading horizon ACS Actividades de is expected to under-perform the Mapfre. But the stock apears to be less risky and, when comparing its historical volatility, ACS Actividades de is 1.23 times less risky than Mapfre. The stock trades about -0.03 of its potential returns per unit of risk. The Mapfre is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 257.00 in Mapfre on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Mapfre or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
ACS Actividades de vs. Mapfre
Performance |
| Timeline |
| ACS Actividades de |
| Mapfre |
ACS Actividades and Mapfre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACS Actividades and Mapfre
The main advantage of trading using opposite ACS Actividades and Mapfre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACS Actividades position performs unexpectedly, Mapfre 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 Mapfre will offset losses from the drop in Mapfre's long position.| ACS Actividades vs. Mapfre | ACS Actividades vs. Enags SA | ACS Actividades vs. Ferrovial | ACS Actividades vs. Endesa SA |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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