Correlation Between Acerinox and Merlin Properties
Can any of the company-specific risk be diversified away by investing in both Acerinox and Merlin Properties 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 Merlin Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox and Merlin Properties SOCIMI, you can compare the effects of market volatilities on Acerinox and Merlin Properties 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 Merlin Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Merlin Properties.
Diversification Opportunities for Acerinox and Merlin Properties
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acerinox and Merlin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox and Merlin Properties SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merlin Properties SOCIMI 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 Merlin Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merlin Properties SOCIMI has no effect on the direction of Acerinox i.e., Acerinox and Merlin Properties go up and down completely randomly.
Pair Corralation between Acerinox and Merlin Properties
Assuming the 90 days trading horizon Acerinox is expected to generate 0.97 times more return on investment than Merlin Properties. However, Acerinox is 1.03 times less risky than Merlin Properties. It trades about 0.11 of its potential returns per unit of risk. Merlin Properties SOCIMI is currently generating about -0.02 per unit of risk. If you would invest 895.00 in Acerinox on August 25, 2024 and sell it today you would earn a total of 46.00 from holding Acerinox or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acerinox vs. Merlin Properties SOCIMI
Performance |
| Timeline |
| Acerinox |
| Merlin Properties SOCIMI |
Acerinox and Merlin Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Merlin Properties
The main advantage of trading using opposite Acerinox and Merlin Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox position performs unexpectedly, Merlin Properties 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 Merlin Properties will offset losses from the drop in Merlin Properties' long position.| Acerinox vs. ACS Actividades de | Acerinox vs. ArcelorMittal SA | Acerinox vs. Mapfre | Acerinox vs. Ferrovial |
| Merlin Properties vs. Neinor Homes SLU | Merlin Properties vs. Metrovacesa SA | Merlin Properties vs. Atresmedia Corporacin de |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |