Correlation Between Capex SA and Aluar Aluminio
Can any of the company-specific risk be diversified away by investing in both Capex SA and Aluar Aluminio 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 Capex SA and Aluar Aluminio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capex SA and Aluar Aluminio Argentino, you can compare the effects of market volatilities on Capex SA and Aluar Aluminio 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 Capex SA with a short position of Aluar Aluminio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and Aluar Aluminio.
Diversification Opportunities for Capex SA and Aluar Aluminio
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capex and Aluar is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and Aluar Aluminio Argentino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluar Aluminio Argentino and Capex SA 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 Capex SA are associated (or correlated) with Aluar Aluminio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluar Aluminio Argentino has no effect on the direction of Capex SA i.e., Capex SA and Aluar Aluminio go up and down completely randomly.
Pair Corralation between Capex SA and Aluar Aluminio
Assuming the 90 days trading horizon Capex SA is expected to generate 1.49 times more return on investment than Aluar Aluminio. However, Capex SA is 1.49 times more volatile than Aluar Aluminio Argentino. It trades about 0.19 of its potential returns per unit of risk. Aluar Aluminio Argentino is currently generating about 0.05 per unit of risk. If you would invest 624,000 in Capex SA on September 12, 2024 and sell it today you would earn a total of 197,000 from holding Capex SA or generate 31.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capex SA vs. Aluar Aluminio Argentino
Performance |
| Timeline |
| Capex SA |
| Aluar Aluminio Argentino |
Capex SA and Aluar Aluminio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capex SA and Aluar Aluminio
The main advantage of trading using opposite Capex SA and Aluar Aluminio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capex SA position performs unexpectedly, Aluar Aluminio 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 Aluar Aluminio will offset losses from the drop in Aluar Aluminio's long position.| Capex SA vs. Harmony Gold Mining | Capex SA vs. Transportadora de Gas | Capex SA vs. Agrometal SAI | Capex SA vs. Telecom Argentina |
| Aluar Aluminio vs. Transportadora de Gas | Aluar Aluminio vs. Harmony Gold Mining | Aluar Aluminio 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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