Correlation Between Acerinox and Prosegur
Can any of the company-specific risk be diversified away by investing in both Acerinox and Prosegur 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 Prosegur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox and Prosegur, you can compare the effects of market volatilities on Acerinox and Prosegur 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 Prosegur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Prosegur.
Diversification Opportunities for Acerinox and Prosegur
Good diversification
The 3 months correlation between Acerinox and Prosegur is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox and Prosegur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosegur 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 Prosegur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosegur has no effect on the direction of Acerinox i.e., Acerinox and Prosegur go up and down completely randomly.
Pair Corralation between Acerinox and Prosegur
Assuming the 90 days trading horizon Acerinox is expected to generate 4.92 times less return on investment than Prosegur. In addition to that, Acerinox is 1.22 times more volatile than Prosegur. It trades about 0.0 of its total potential returns per unit of risk. Prosegur is currently generating about 0.02 per unit of volatility. If you would invest 176.00 in Prosegur on August 26, 2024 and sell it today you would earn a total of 5.00 from holding Prosegur or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acerinox vs. Prosegur
Performance |
| Timeline |
| Acerinox |
| Prosegur |
Acerinox and Prosegur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Prosegur
The main advantage of trading using opposite Acerinox and Prosegur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox position performs unexpectedly, Prosegur 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 Prosegur will offset losses from the drop in Prosegur'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 Transaction History module to view history of all your transactions and understand their impact on performance.
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