Correlation Between Corporacion Financiera and Iffe Futura
Can any of the company-specific risk be diversified away by investing in both Corporacion Financiera and Iffe Futura 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 Iffe Futura 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 Iffe Futura SA, you can compare the effects of market volatilities on Corporacion Financiera and Iffe Futura 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 Iffe Futura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion Financiera and Iffe Futura.
Diversification Opportunities for Corporacion Financiera and Iffe Futura
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporacion and Iffe is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion Financiera Alba and Iffe Futura SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iffe Futura 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 Iffe Futura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iffe Futura SA has no effect on the direction of Corporacion Financiera i.e., Corporacion Financiera and Iffe Futura go up and down completely randomly.
Pair Corralation between Corporacion Financiera and Iffe Futura
Assuming the 90 days trading horizon Corporacion Financiera Alba is expected to generate 0.19 times more return on investment than Iffe Futura. However, Corporacion Financiera Alba is 5.39 times less risky than Iffe Futura. It trades about 0.14 of its potential returns per unit of risk. Iffe Futura SA is currently generating about 0.01 per unit of risk. If you would invest 8,260 in Corporacion Financiera Alba on October 21, 2024 and sell it today you would earn a total of 50.00 from holding Corporacion Financiera Alba or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporacion Financiera Alba vs. Iffe Futura SA
Performance |
| Timeline |
| Corporacion Financiera |
| Iffe Futura SA |
Corporacion Financiera and Iffe Futura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporacion Financiera and Iffe Futura
The main advantage of trading using opposite Corporacion Financiera and Iffe Futura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion Financiera position performs unexpectedly, Iffe Futura 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 Iffe Futura will offset losses from the drop in Iffe Futura's long position.| Corporacion Financiera vs. Miquel y Costas | Corporacion Financiera vs. Grupo Catalana Occidente | Corporacion Financiera vs. Construcciones y Auxiliar | Corporacion Financiera vs. Prosegur |
| Iffe Futura vs. Ebro Foods | Iffe Futura vs. Elaia Investment Spain | Iffe Futura vs. Caixabank SA | Iffe Futura vs. Parlem Telecom Companyia |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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