Correlation Between Agrometal SAI and Capex SA
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI and Capex SA 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 Capex SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrometal SAI and Capex SA, you can compare the effects of market volatilities on Agrometal SAI and Capex SA 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 Capex SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and Capex SA.
Diversification Opportunities for Agrometal SAI and Capex SA
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agrometal and Capex is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and Capex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capex SA 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 Capex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capex SA has no effect on the direction of Agrometal SAI i.e., Agrometal SAI and Capex SA go up and down completely randomly.
Pair Corralation between Agrometal SAI and Capex SA
Assuming the 90 days trading horizon Agrometal SAI is expected to generate 0.78 times more return on investment than Capex SA. However, Agrometal SAI is 1.28 times less risky than Capex SA. It trades about -0.08 of its potential returns per unit of risk. Capex SA is currently generating about -0.16 per unit of risk. If you would invest 7,430 in Agrometal SAI on November 3, 2024 and sell it today you would lose (520.00) from holding Agrometal SAI or give up 7.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrometal SAI vs. Capex SA
Performance |
| Timeline |
| Agrometal SAI |
| Capex SA |
Agrometal SAI and Capex SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and Capex SA
The main advantage of trading using opposite Agrometal SAI and Capex SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI position performs unexpectedly, Capex SA 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 Capex SA will offset losses from the drop in Capex SA's long position.| Agrometal SAI vs. Compania de Transporte | Agrometal SAI vs. Telecom Argentina | Agrometal SAI vs. United States Steel |
| Capex SA vs. Agrometal SAI | Capex SA vs. Transportadora de Gas | Capex SA vs. Telecom Argentina | Capex SA 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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