Correlation Between Borges Agricultural and GMP Property
Can any of the company-specific risk be diversified away by investing in both Borges Agricultural and GMP Property 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 GMP Property 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 GMP Property SOCIMI, you can compare the effects of market volatilities on Borges Agricultural and GMP Property 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 GMP Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borges Agricultural and GMP Property.
Diversification Opportunities for Borges Agricultural and GMP Property
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Borges and GMP is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Borges Agricultural Industrial and GMP Property SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMP Property SOCIMI 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 GMP Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMP Property SOCIMI has no effect on the direction of Borges Agricultural i.e., Borges Agricultural and GMP Property go up and down completely randomly.
Pair Corralation between Borges Agricultural and GMP Property
Assuming the 90 days trading horizon Borges Agricultural is expected to generate 4.25 times less return on investment than GMP Property. But when comparing it to its historical volatility, Borges Agricultural Industrial is 2.5 times less risky than GMP Property. It trades about 0.03 of its potential returns per unit of risk. GMP Property SOCIMI is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,003 in GMP Property SOCIMI on September 2, 2024 and sell it today you would earn a total of 1,597 from holding GMP Property SOCIMI or generate 31.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Borges Agricultural Industrial vs. GMP Property SOCIMI
Performance |
| Timeline |
| Borges Agricultural |
| GMP Property SOCIMI |
Borges Agricultural and GMP Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borges Agricultural and GMP Property
The main advantage of trading using opposite Borges Agricultural and GMP Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borges Agricultural position performs unexpectedly, GMP Property 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 GMP Property will offset losses from the drop in GMP Property's long position.| Borges Agricultural vs. Lyxor UCITS Ibex35 | Borges Agricultural vs. Metrovacesa SA | Borges Agricultural vs. Hispanotels Inversiones SOCIMI | Borges Agricultural vs. Mapfre |
| GMP Property vs. Labiana Health SA | GMP Property vs. Squirrel Media SA | GMP Property vs. Plasticos Compuestos SA | GMP Property vs. Borges Agricultural Industrial |
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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