Correlation Between Autopistas Del and Agrometal SAI
Can any of the company-specific risk be diversified away by investing in both Autopistas Del and Agrometal SAI 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 Autopistas Del and Agrometal SAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autopistas del Sol and Agrometal SAI, you can compare the effects of market volatilities on Autopistas Del and Agrometal SAI 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 Autopistas Del with a short position of Agrometal SAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autopistas Del and Agrometal SAI.
Diversification Opportunities for Autopistas Del and Agrometal SAI
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Autopistas and Agrometal is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Autopistas del Sol and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI and Autopistas Del 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 Autopistas del Sol are associated (or correlated) with Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Autopistas Del i.e., Autopistas Del and Agrometal SAI go up and down completely randomly.
Pair Corralation between Autopistas Del and Agrometal SAI
Assuming the 90 days trading horizon Autopistas del Sol is expected to generate 0.57 times more return on investment than Agrometal SAI. However, Autopistas del Sol is 1.77 times less risky than Agrometal SAI. It trades about 0.15 of its potential returns per unit of risk. Agrometal SAI is currently generating about 0.06 per unit of risk. If you would invest 41,300 in Autopistas del Sol on September 26, 2024 and sell it today you would earn a total of 355,700 from holding Autopistas del Sol or generate 861.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autopistas del Sol vs. Agrometal SAI
Performance |
| Timeline |
| Autopistas del Sol |
| Agrometal SAI |
Autopistas Del and Agrometal SAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autopistas Del and Agrometal SAI
The main advantage of trading using opposite Autopistas Del and Agrometal SAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autopistas Del position performs unexpectedly, Agrometal SAI 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 Agrometal SAI will offset losses from the drop in Agrometal SAI's long position.| Autopistas Del vs. Agrometal SAI | Autopistas Del vs. United States Steel | Autopistas Del vs. Harmony Gold Mining | Autopistas Del vs. Transportadora de Gas |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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