Correlation Between Bolsas Y and Molinos Agro
Can any of the company-specific risk be diversified away by investing in both Bolsas Y and Molinos Agro 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 Bolsas Y and Molinos Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bolsas y Mercados and Molinos Agro SA, you can compare the effects of market volatilities on Bolsas Y and Molinos Agro 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 Bolsas Y with a short position of Molinos Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolsas Y and Molinos Agro.
Diversification Opportunities for Bolsas Y and Molinos Agro
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bolsas and Molinos is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Bolsas y Mercados and Molinos Agro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molinos Agro SA and Bolsas Y 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 Bolsas y Mercados are associated (or correlated) with Molinos Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molinos Agro SA has no effect on the direction of Bolsas Y i.e., Bolsas Y and Molinos Agro go up and down completely randomly.
Pair Corralation between Bolsas Y and Molinos Agro
Assuming the 90 days trading horizon Bolsas Y is expected to generate 1.33 times less return on investment than Molinos Agro. But when comparing it to its historical volatility, Bolsas y Mercados is 1.45 times less risky than Molinos Agro. It trades about 0.17 of its potential returns per unit of risk. Molinos Agro SA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,835,000 in Molinos Agro SA on November 2, 2024 and sell it today you would earn a total of 1,425,000 from holding Molinos Agro SA or generate 77.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.04% |
| Values | Daily Returns |
Bolsas y Mercados vs. Molinos Agro SA
Performance |
| Timeline |
| Bolsas y Mercados |
| Molinos Agro SA |
Bolsas Y and Molinos Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bolsas Y and Molinos Agro
The main advantage of trading using opposite Bolsas Y and Molinos Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bolsas Y position performs unexpectedly, Molinos Agro 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 Agro will offset losses from the drop in Molinos Agro's long position.| Bolsas Y vs. Harmony Gold Mining | Bolsas Y vs. Compania de Transporte | Bolsas Y vs. United States Steel | Bolsas Y vs. Agrometal SAI |
| Molinos Agro vs. Harmony Gold Mining | Molinos Agro vs. Compania de Transporte | Molinos Agro vs. Agrometal SAI |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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