Correlation Between Agrometal SAI and Aluar Aluminio
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI and Aluar Aluminio 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 Agrometal SAI and Aluar Aluminio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrometal SAI and Aluar Aluminio Argentino, you can compare the effects of market volatilities on Agrometal SAI and Aluar Aluminio 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 Agrometal SAI with a short position of Aluar Aluminio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and Aluar Aluminio.
Diversification Opportunities for Agrometal SAI and Aluar Aluminio
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Agrometal and Aluar is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and Aluar Aluminio Argentino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluar Aluminio Argentino and Agrometal SAI 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 Agrometal SAI are associated (or correlated) with Aluar Aluminio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluar Aluminio Argentino has no effect on the direction of Agrometal SAI i.e., Agrometal SAI and Aluar Aluminio go up and down completely randomly.
Pair Corralation between Agrometal SAI and Aluar Aluminio
Assuming the 90 days trading horizon Agrometal SAI is expected to generate 1.43 times more return on investment than Aluar Aluminio. However, Agrometal SAI is 1.43 times more volatile than Aluar Aluminio Argentino. It trades about 0.56 of its potential returns per unit of risk. Aluar Aluminio Argentino is currently generating about 0.24 per unit of risk. If you would invest 5,210 in Agrometal SAI on August 26, 2024 and sell it today you would earn a total of 2,500 from holding Agrometal SAI or generate 47.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrometal SAI vs. Aluar Aluminio Argentino
Performance |
| Timeline |
| Agrometal SAI |
| Aluar Aluminio Argentino |
Agrometal SAI and Aluar Aluminio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and Aluar Aluminio
The main advantage of trading using opposite Agrometal SAI and Aluar Aluminio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI position performs unexpectedly, Aluar Aluminio 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 Aluar Aluminio will offset losses from the drop in Aluar Aluminio's long position.| Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. United States Steel | Agrometal SAI vs. Compania de Transporte |
| Aluar Aluminio vs. Agrometal SAI | Aluar Aluminio vs. United States Steel | Aluar Aluminio vs. Compania de Transporte | Aluar Aluminio vs. Harmony Gold Mining |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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