Correlation Between Acerinox and Inmobiliaria Colonial
Can any of the company-specific risk be diversified away by investing in both Acerinox and Inmobiliaria Colonial 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 Inmobiliaria Colonial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox and Inmobiliaria Colonial SA, you can compare the effects of market volatilities on Acerinox and Inmobiliaria Colonial 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 Inmobiliaria Colonial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Inmobiliaria Colonial.
Diversification Opportunities for Acerinox and Inmobiliaria Colonial
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acerinox and Inmobiliaria is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox and Inmobiliaria Colonial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inmobiliaria Colonial 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 Inmobiliaria Colonial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inmobiliaria Colonial has no effect on the direction of Acerinox i.e., Acerinox and Inmobiliaria Colonial go up and down completely randomly.
Pair Corralation between Acerinox and Inmobiliaria Colonial
Assuming the 90 days trading horizon Acerinox is expected to generate 1.19 times more return on investment than Inmobiliaria Colonial. However, Acerinox is 1.19 times more volatile than Inmobiliaria Colonial SA. It trades about 0.26 of its potential returns per unit of risk. Inmobiliaria Colonial SA is currently generating about -0.01 per unit of risk. If you would invest 855.00 in Acerinox on September 3, 2024 and sell it today you would earn a total of 96.00 from holding Acerinox or generate 11.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acerinox vs. Inmobiliaria Colonial SA
Performance |
| Timeline |
| Acerinox |
| Inmobiliaria Colonial |
Acerinox and Inmobiliaria Colonial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Inmobiliaria Colonial
The main advantage of trading using opposite Acerinox and Inmobiliaria Colonial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox position performs unexpectedly, Inmobiliaria Colonial 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 Inmobiliaria Colonial will offset losses from the drop in Inmobiliaria Colonial's long position.| Acerinox vs. ACS Actividades de | Acerinox vs. ArcelorMittal SA | Acerinox vs. Mapfre | Acerinox vs. Ferrovial |
| Inmobiliaria Colonial vs. Merlin Properties SOCIMI | Inmobiliaria Colonial vs. Ferrovial | Inmobiliaria Colonial vs. Bankinter | Inmobiliaria Colonial vs. Acerinox |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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