Correlation Between Acerinox and Almirall
Can any of the company-specific risk be diversified away by investing in both Acerinox and Almirall 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 Acerinox and Almirall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox and Almirall SA, you can compare the effects of market volatilities on Acerinox and Almirall 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 Acerinox with a short position of Almirall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Almirall.
Diversification Opportunities for Acerinox and Almirall
Very good diversification
The 3 months correlation between Acerinox and Almirall is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox and Almirall SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almirall SA and Acerinox 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 Acerinox are associated (or correlated) with Almirall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almirall SA has no effect on the direction of Acerinox i.e., Acerinox and Almirall go up and down completely randomly.
Pair Corralation between Acerinox and Almirall
Assuming the 90 days trading horizon Acerinox is expected to generate 1.02 times more return on investment than Almirall. However, Acerinox is 1.02 times more volatile than Almirall SA. It trades about 0.02 of its potential returns per unit of risk. Almirall SA is currently generating about 0.0 per unit of risk. If you would invest 854.00 in Acerinox on September 3, 2024 and sell it today you would earn a total of 97.00 from holding Acerinox or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acerinox vs. Almirall SA
Performance |
| Timeline |
| Acerinox |
| Almirall SA |
Acerinox and Almirall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Almirall
The main advantage of trading using opposite Acerinox and Almirall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox position performs unexpectedly, Almirall 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 Almirall will offset losses from the drop in Almirall's long position.| Acerinox vs. ACS Actividades de | Acerinox vs. ArcelorMittal SA | Acerinox vs. Mapfre | Acerinox vs. Ferrovial |
| Almirall vs. Grifols SA | Almirall vs. Acerinox | Almirall vs. Laboratorios Farmaceuticos ROVI | Almirall vs. ENCE Energa y |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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