Correlation Between ACS Actividades and Vale SA
Can any of the company-specific risk be diversified away by investing in both ACS Actividades and Vale SA 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 Vale SA 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 Vale SA, you can compare the effects of market volatilities on ACS Actividades and Vale SA 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 Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACS Actividades and Vale SA.
Diversification Opportunities for ACS Actividades and Vale SA
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ACS and Vale is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades de and Vale SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA 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 Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA has no effect on the direction of ACS Actividades i.e., ACS Actividades and Vale SA go up and down completely randomly.
Pair Corralation between ACS Actividades and Vale SA
Assuming the 90 days trading horizon ACS Actividades de is expected to generate 0.74 times more return on investment than Vale SA. However, ACS Actividades de is 1.36 times less risky than Vale SA. It trades about 0.07 of its potential returns per unit of risk. Vale SA is currently generating about -0.08 per unit of risk. If you would invest 3,834 in ACS Actividades de on September 25, 2024 and sell it today you would earn a total of 904.00 from holding ACS Actividades de or generate 23.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
ACS Actividades de vs. Vale SA
Performance |
| Timeline |
| ACS Actividades de |
| Vale SA |
ACS Actividades and Vale SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACS Actividades and Vale SA
The main advantage of trading using opposite ACS Actividades and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACS Actividades position performs unexpectedly, Vale SA 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 Vale SA will offset losses from the drop in Vale SA's long position.| ACS Actividades vs. Enags SA | ACS Actividades vs. Viscofan | ACS Actividades vs. Mapfre | ACS Actividades vs. Ebro Foods |
| Vale SA vs. Lingotes | Vale SA vs. Banco Santander | Vale SA vs. ACS Actividades de | Vale SA vs. Libertas 7 SA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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