Correlation Between Aluar Aluminio and Matba Rofex
Can any of the company-specific risk be diversified away by investing in both Aluar Aluminio and Matba Rofex 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 Aluar Aluminio and Matba Rofex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluar Aluminio Argentino and Matba Rofex SA, you can compare the effects of market volatilities on Aluar Aluminio and Matba Rofex 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 Aluar Aluminio with a short position of Matba Rofex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluar Aluminio and Matba Rofex.
Diversification Opportunities for Aluar Aluminio and Matba Rofex
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aluar and Matba is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aluar Aluminio Argentino and Matba Rofex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matba Rofex SA and Aluar Aluminio 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 Aluar Aluminio Argentino are associated (or correlated) with Matba Rofex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matba Rofex SA has no effect on the direction of Aluar Aluminio i.e., Aluar Aluminio and Matba Rofex go up and down completely randomly.
Pair Corralation between Aluar Aluminio and Matba Rofex
Assuming the 90 days trading horizon Aluar Aluminio Argentino is expected to under-perform the Matba Rofex. But the stock apears to be less risky and, when comparing its historical volatility, Aluar Aluminio Argentino is 1.16 times less risky than Matba Rofex. The stock trades about -0.37 of its potential returns per unit of risk. The Matba Rofex SA is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest 267,000 in Matba Rofex SA on October 20, 2024 and sell it today you would lose (34,000) from holding Matba Rofex SA or give up 12.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Aluar Aluminio Argentino vs. Matba Rofex SA
Performance |
| Timeline |
| Aluar Aluminio Argentino |
| Matba Rofex SA |
Aluar Aluminio and Matba Rofex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluar Aluminio and Matba Rofex
The main advantage of trading using opposite Aluar Aluminio and Matba Rofex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluar Aluminio position performs unexpectedly, Matba Rofex 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 Matba Rofex will offset losses from the drop in Matba Rofex's long position.| Aluar Aluminio vs. American Express Co | Aluar Aluminio vs. QUALCOMM Incorporated | Aluar Aluminio vs. United States Steel | Aluar Aluminio vs. Pfizer Inc |
| Matba Rofex vs. Compania de Transporte | Matba Rofex vs. Agrometal SAI | Matba Rofex 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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