Correlation Between Almirall and Miquel Y
Can any of the company-specific risk be diversified away by investing in both Almirall and Miquel Y 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 Almirall and Miquel Y into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Almirall SA and Miquel y Costas, you can compare the effects of market volatilities on Almirall and Miquel Y 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 Almirall with a short position of Miquel Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almirall and Miquel Y.
Diversification Opportunities for Almirall and Miquel Y
Good diversification
The 3 months correlation between Almirall and Miquel is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Almirall SA and Miquel y Costas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miquel y Costas and Almirall 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 Almirall SA are associated (or correlated) with Miquel Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miquel y Costas has no effect on the direction of Almirall i.e., Almirall and Miquel Y go up and down completely randomly.
Pair Corralation between Almirall and Miquel Y
Assuming the 90 days trading horizon Almirall SA is expected to under-perform the Miquel Y. But the stock apears to be less risky and, when comparing its historical volatility, Almirall SA is 1.24 times less risky than Miquel Y. The stock trades about -0.02 of its potential returns per unit of risk. The Miquel y Costas is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,211 in Miquel y Costas on September 12, 2024 and sell it today you would earn a total of 24.00 from holding Miquel y Costas or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Almirall SA vs. Miquel y Costas
Performance |
| Timeline |
| Almirall SA |
| Miquel y Costas |
Almirall and Miquel Y Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Almirall and Miquel Y
The main advantage of trading using opposite Almirall and Miquel Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almirall position performs unexpectedly, Miquel Y 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 Miquel Y will offset losses from the drop in Miquel Y's long position.| Almirall vs. Grifols SA | Almirall vs. Acerinox | Almirall vs. Laboratorios Farmaceuticos ROVI | Almirall vs. ENCE Energa y |
| Miquel Y vs. Vidrala SA | Miquel Y vs. Grupo Catalana Occidente | Miquel Y vs. Iberpapel Gestion SA | Miquel Y vs. Cia de Distribucion |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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