Correlation Between Acciona and Grupo Catalana
Can any of the company-specific risk be diversified away by investing in both Acciona and Grupo Catalana 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 Acciona and Grupo Catalana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acciona and Grupo Catalana Occidente, you can compare the effects of market volatilities on Acciona and Grupo Catalana 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 Acciona with a short position of Grupo Catalana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acciona and Grupo Catalana.
Diversification Opportunities for Acciona and Grupo Catalana
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acciona and Grupo is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Acciona and Grupo Catalana Occidente in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Catalana Occidente and Acciona 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 Acciona are associated (or correlated) with Grupo Catalana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Catalana Occidente has no effect on the direction of Acciona i.e., Acciona and Grupo Catalana go up and down completely randomly.
Pair Corralation between Acciona and Grupo Catalana
Assuming the 90 days trading horizon Acciona is expected to under-perform the Grupo Catalana. In addition to that, Acciona is 2.05 times more volatile than Grupo Catalana Occidente. It trades about -0.01 of its total potential returns per unit of risk. Grupo Catalana Occidente is currently generating about 0.1 per unit of volatility. If you would invest 2,691 in Grupo Catalana Occidente on August 28, 2024 and sell it today you would earn a total of 954.00 from holding Grupo Catalana Occidente or generate 35.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acciona vs. Grupo Catalana Occidente
Performance |
| Timeline |
| Acciona |
| Grupo Catalana Occidente |
Acciona and Grupo Catalana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acciona and Grupo Catalana
The main advantage of trading using opposite Acciona and Grupo Catalana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acciona position performs unexpectedly, Grupo Catalana 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 Grupo Catalana will offset losses from the drop in Grupo Catalana's long position.| Acciona vs. Enags SA | Acciona vs. Mapfre | Acciona vs. ACS Actividades de | Acciona vs. Merlin Properties SOCIMI |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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