Correlation Between Agrometal SAI and Dycasa SA
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI and Dycasa 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 Dycasa 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 Dycasa SA, you can compare the effects of market volatilities on Agrometal SAI and Dycasa 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 Dycasa SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and Dycasa SA.
Diversification Opportunities for Agrometal SAI and Dycasa SA
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agrometal and Dycasa is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and Dycasa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dycasa 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 Dycasa SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dycasa SA has no effect on the direction of Agrometal SAI i.e., Agrometal SAI and Dycasa SA go up and down completely randomly.
Pair Corralation between Agrometal SAI and Dycasa SA
Assuming the 90 days trading horizon Agrometal SAI is expected to generate 0.96 times more return on investment than Dycasa SA. However, Agrometal SAI is 1.04 times less risky than Dycasa SA. It trades about 0.45 of its potential returns per unit of risk. Dycasa SA is currently generating about 0.25 per unit of risk. If you would invest 5,200 in Agrometal SAI on September 1, 2024 and sell it today you would earn a total of 2,270 from holding Agrometal SAI or generate 43.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Agrometal SAI vs. Dycasa SA
Performance |
| Timeline |
| Agrometal SAI |
| Dycasa SA |
Agrometal SAI and Dycasa SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and Dycasa SA
The main advantage of trading using opposite Agrometal SAI and Dycasa SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI position performs unexpectedly, Dycasa 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 Dycasa SA will offset losses from the drop in Dycasa SA's long position.| Agrometal SAI vs. American Express Co | Agrometal SAI vs. United States Steel | Agrometal SAI vs. Pfizer Inc | Agrometal SAI vs. Distribuidora de Gas |
| Dycasa SA vs. Transportadora de Gas | Dycasa SA vs. Compania de Transporte | Dycasa SA vs. Agrometal SAI | Dycasa 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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