Correlation Between Corporacion Financiera and Grifols SA
Can any of the company-specific risk be diversified away by investing in both Corporacion Financiera and Grifols 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 Corporacion Financiera and Grifols SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporacion Financiera Alba and Grifols SA, you can compare the effects of market volatilities on Corporacion Financiera and Grifols 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 Corporacion Financiera with a short position of Grifols SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion Financiera and Grifols SA.
Diversification Opportunities for Corporacion Financiera and Grifols SA
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Corporacion and Grifols is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion Financiera Alba and Grifols SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grifols SA and Corporacion Financiera 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 Corporacion Financiera Alba are associated (or correlated) with Grifols SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grifols SA has no effect on the direction of Corporacion Financiera i.e., Corporacion Financiera and Grifols SA go up and down completely randomly.
Pair Corralation between Corporacion Financiera and Grifols SA
Assuming the 90 days trading horizon Corporacion Financiera Alba is expected to under-perform the Grifols SA. But the stock apears to be less risky and, when comparing its historical volatility, Corporacion Financiera Alba is 4.01 times less risky than Grifols SA. The stock trades about -0.18 of its potential returns per unit of risk. The Grifols SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 997.00 in Grifols SA on August 30, 2024 and sell it today you would lose (28.00) from holding Grifols SA or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporacion Financiera Alba vs. Grifols SA
Performance |
| Timeline |
| Corporacion Financiera |
| Grifols SA |
Corporacion Financiera and Grifols SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporacion Financiera and Grifols SA
The main advantage of trading using opposite Corporacion Financiera and Grifols SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion Financiera position performs unexpectedly, Grifols 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 Grifols SA will offset losses from the drop in Grifols SA's long position.| Corporacion Financiera vs. Metrovacesa SA | Corporacion Financiera vs. Atom Hoteles Socimi | Corporacion Financiera vs. Aedas Homes SL | Corporacion Financiera vs. Hispanotels Inversiones SOCIMI |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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