Correlation Between Borges Agricultural and Grupo Ezentis
Can any of the company-specific risk be diversified away by investing in both Borges Agricultural and Grupo Ezentis 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 Borges Agricultural and Grupo Ezentis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borges Agricultural Industrial and Grupo Ezentis SA, you can compare the effects of market volatilities on Borges Agricultural and Grupo Ezentis 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 Borges Agricultural with a short position of Grupo Ezentis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borges Agricultural and Grupo Ezentis.
Diversification Opportunities for Borges Agricultural and Grupo Ezentis
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Borges and Grupo is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Borges Agricultural Industrial and Grupo Ezentis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Ezentis SA and Borges Agricultural 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 Borges Agricultural Industrial are associated (or correlated) with Grupo Ezentis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Ezentis SA has no effect on the direction of Borges Agricultural i.e., Borges Agricultural and Grupo Ezentis go up and down completely randomly.
Pair Corralation between Borges Agricultural and Grupo Ezentis
Assuming the 90 days trading horizon Borges Agricultural Industrial is expected to generate 0.43 times more return on investment than Grupo Ezentis. However, Borges Agricultural Industrial is 2.32 times less risky than Grupo Ezentis. It trades about 0.06 of its potential returns per unit of risk. Grupo Ezentis SA is currently generating about -0.08 per unit of risk. If you would invest 270.00 in Borges Agricultural Industrial on September 4, 2024 and sell it today you would earn a total of 22.00 from holding Borges Agricultural Industrial or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Borges Agricultural Industrial vs. Grupo Ezentis SA
Performance |
| Timeline |
| Borges Agricultural |
| Grupo Ezentis SA |
Borges Agricultural and Grupo Ezentis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borges Agricultural and Grupo Ezentis
The main advantage of trading using opposite Borges Agricultural and Grupo Ezentis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borges Agricultural position performs unexpectedly, Grupo Ezentis 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 Ezentis will offset losses from the drop in Grupo Ezentis' long position.| Borges Agricultural vs. Pescanova SA | Borges Agricultural vs. Metrovacesa SA | Borges Agricultural vs. Elecnor SA | Borges Agricultural vs. Mapfre |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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