Correlation Between Acerinox and Acciona
Can any of the company-specific risk be diversified away by investing in both Acerinox and Acciona 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 Acciona into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox and Acciona, you can compare the effects of market volatilities on Acerinox and Acciona 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 Acciona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Acciona.
Diversification Opportunities for Acerinox and Acciona
Good diversification
The 3 months correlation between Acerinox and Acciona is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox and Acciona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acciona 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 Acciona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acciona has no effect on the direction of Acerinox i.e., Acerinox and Acciona go up and down completely randomly.
Pair Corralation between Acerinox and Acciona
Assuming the 90 days trading horizon Acerinox is expected to generate 0.75 times more return on investment than Acciona. However, Acerinox is 1.33 times less risky than Acciona. It trades about 0.1 of its potential returns per unit of risk. Acciona is currently generating about -0.06 per unit of risk. If you would invest 944.00 in Acerinox on November 3, 2024 and sell it today you would earn a total of 27.00 from holding Acerinox or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Acerinox vs. Acciona
Performance |
| Timeline |
| Acerinox |
| Acciona |
Acerinox and Acciona Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Acciona
The main advantage of trading using opposite Acerinox and Acciona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox position performs unexpectedly, Acciona 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 Acciona will offset losses from the drop in Acciona's long position.| Acerinox vs. ACS Actividades de | Acerinox vs. ArcelorMittal SA | Acerinox vs. Mapfre | Acerinox vs. Ferrovial 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |