Correlation Between Banco Macro and Molinos Rio
Can any of the company-specific risk be diversified away by investing in both Banco Macro and Molinos Rio 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 Banco Macro and Molinos Rio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Macro SA and Molinos Rio de, you can compare the effects of market volatilities on Banco Macro and Molinos Rio 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 Banco Macro with a short position of Molinos Rio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Macro and Molinos Rio.
Diversification Opportunities for Banco Macro and Molinos Rio
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Banco and Molinos is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Banco Macro SA and Molinos Rio de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molinos Rio de and Banco Macro 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 Banco Macro SA are associated (or correlated) with Molinos Rio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molinos Rio de has no effect on the direction of Banco Macro i.e., Banco Macro and Molinos Rio go up and down completely randomly.
Pair Corralation between Banco Macro and Molinos Rio
Assuming the 90 days trading horizon Banco Macro is expected to generate 1.84 times less return on investment than Molinos Rio. But when comparing it to its historical volatility, Banco Macro SA is 3.65 times less risky than Molinos Rio. It trades about 0.15 of its potential returns per unit of risk. Molinos Rio de is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 12,900 in Molinos Rio de on November 5, 2024 and sell it today you would earn a total of 487,100 from holding Molinos Rio de or generate 3775.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Banco Macro SA vs. Molinos Rio de
Performance |
| Timeline |
| Banco Macro SA |
| Molinos Rio de |
Banco Macro and Molinos Rio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Macro and Molinos Rio
The main advantage of trading using opposite Banco Macro and Molinos Rio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Macro position performs unexpectedly, Molinos Rio 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 Molinos Rio will offset losses from the drop in Molinos Rio's long position.| Banco Macro vs. Compania de Transporte | Banco Macro vs. Agrometal SAI | Banco Macro vs. Harmony Gold Mining | Banco Macro vs. United States Steel |
| Molinos Rio vs. Agrometal SAI | Molinos Rio vs. Compania de Transporte | Molinos Rio vs. Transportadora de Gas | Molinos Rio vs. Telecom Argentina |
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 Stocks Directory module to find actively traded stocks across global markets.
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