Correlation Between Acerinox and Cia De
Can any of the company-specific risk be diversified away by investing in both Acerinox and Cia De 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 Cia De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox and Cia de Distribucion, you can compare the effects of market volatilities on Acerinox and Cia De 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 Cia De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Cia De.
Diversification Opportunities for Acerinox and Cia De
Very good diversification
The 3 months correlation between Acerinox and Cia is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox and Cia de Distribucion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cia de Distribucion 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 Cia De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cia de Distribucion has no effect on the direction of Acerinox i.e., Acerinox and Cia De go up and down completely randomly.
Pair Corralation between Acerinox and Cia De
Assuming the 90 days trading horizon Acerinox is expected to generate 4.14 times less return on investment than Cia De. In addition to that, Acerinox is 1.56 times more volatile than Cia de Distribucion. It trades about 0.01 of its total potential returns per unit of risk. Cia de Distribucion is currently generating about 0.09 per unit of volatility. If you would invest 2,230 in Cia de Distribucion on August 29, 2024 and sell it today you would earn a total of 816.00 from holding Cia de Distribucion or generate 36.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acerinox vs. Cia de Distribucion
Performance |
| Timeline |
| Acerinox |
| Cia de Distribucion |
Acerinox and Cia De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Cia De
The main advantage of trading using opposite Acerinox and Cia De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox position performs unexpectedly, Cia De 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 Cia De will offset losses from the drop in Cia De's long position.| Acerinox vs. ACS Actividades de | Acerinox vs. ArcelorMittal SA | Acerinox vs. Mapfre | Acerinox vs. Ferrovial |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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