Correlation Between Acerinox and Tubos Reunidos
Can any of the company-specific risk be diversified away by investing in both Acerinox and Tubos Reunidos 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 Tubos Reunidos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox and Tubos Reunidos SA, you can compare the effects of market volatilities on Acerinox and Tubos Reunidos 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 Tubos Reunidos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Tubos Reunidos.
Diversification Opportunities for Acerinox and Tubos Reunidos
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Acerinox and Tubos is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox and Tubos Reunidos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tubos Reunidos SA 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 Tubos Reunidos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tubos Reunidos SA has no effect on the direction of Acerinox i.e., Acerinox and Tubos Reunidos go up and down completely randomly.
Pair Corralation between Acerinox and Tubos Reunidos
Assuming the 90 days trading horizon Acerinox is expected to generate 0.68 times more return on investment than Tubos Reunidos. However, Acerinox is 1.47 times less risky than Tubos Reunidos. It trades about 0.25 of its potential returns per unit of risk. Tubos Reunidos SA is currently generating about 0.01 per unit of risk. If you would invest 855.00 in Acerinox on September 4, 2024 and sell it today you would earn a total of 95.00 from holding Acerinox or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acerinox vs. Tubos Reunidos SA
Performance |
| Timeline |
| Acerinox |
| Tubos Reunidos SA |
Acerinox and Tubos Reunidos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Tubos Reunidos
The main advantage of trading using opposite Acerinox and Tubos Reunidos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox position performs unexpectedly, Tubos Reunidos 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 Tubos Reunidos will offset losses from the drop in Tubos Reunidos' long position.| Acerinox vs. ACS Actividades de | Acerinox vs. ArcelorMittal SA | Acerinox vs. Mapfre | Acerinox vs. Ferrovial |
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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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