Correlation Between Aedas Homes and Cox ABG
Can any of the company-specific risk be diversified away by investing in both Aedas Homes and Cox ABG 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 Aedas Homes and Cox ABG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SL and Cox ABG Group, you can compare the effects of market volatilities on Aedas Homes and Cox ABG 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 Aedas Homes with a short position of Cox ABG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and Cox ABG.
Diversification Opportunities for Aedas Homes and Cox ABG
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aedas and Cox is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SL and Cox ABG Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cox ABG Group and Aedas Homes 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 Aedas Homes SL are associated (or correlated) with Cox ABG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cox ABG Group has no effect on the direction of Aedas Homes i.e., Aedas Homes and Cox ABG go up and down completely randomly.
Pair Corralation between Aedas Homes and Cox ABG
Assuming the 90 days trading horizon Aedas Homes SL is expected to generate 0.95 times more return on investment than Cox ABG. However, Aedas Homes SL is 1.05 times less risky than Cox ABG. It trades about 0.22 of its potential returns per unit of risk. Cox ABG Group is currently generating about -0.02 per unit of risk. If you would invest 2,545 in Aedas Homes SL on October 26, 2024 and sell it today you would earn a total of 210.00 from holding Aedas Homes SL or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Aedas Homes SL vs. Cox ABG Group
Performance |
| Timeline |
| Aedas Homes SL |
| Cox ABG Group |
Aedas Homes and Cox ABG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and Cox ABG
The main advantage of trading using opposite Aedas Homes and Cox ABG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes position performs unexpectedly, Cox ABG 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 Cox ABG will offset losses from the drop in Cox ABG's long position.| Aedas Homes vs. Neinor Homes SLU | Aedas Homes vs. Metrovacesa SA | Aedas Homes vs. Merlin Properties SOCIMI | Aedas Homes vs. Atresmedia Corporacin de |
| Cox ABG vs. Aedas Homes SL | Cox ABG vs. Media Investment Optimization | Cox ABG vs. Borges Agricultural Industrial | Cox ABG 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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