Correlation Between Carboclor and Capex SA
Can any of the company-specific risk be diversified away by investing in both Carboclor and Capex SA 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 Carboclor and Capex SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carboclor and Capex SA, you can compare the effects of market volatilities on Carboclor and Capex SA 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 Carboclor with a short position of Capex SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carboclor and Capex SA.
Diversification Opportunities for Carboclor and Capex SA
Very poor diversification
The 3 months correlation between Carboclor and Capex is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Carboclor and Capex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capex SA and Carboclor 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 Carboclor are associated (or correlated) with Capex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capex SA has no effect on the direction of Carboclor i.e., Carboclor and Capex SA go up and down completely randomly.
Pair Corralation between Carboclor and Capex SA
Assuming the 90 days trading horizon Carboclor is expected to under-perform the Capex SA. But the stock apears to be less risky and, when comparing its historical volatility, Carboclor is 1.76 times less risky than Capex SA. The stock trades about -0.22 of its potential returns per unit of risk. The Capex SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 747,000 in Capex SA on September 24, 2024 and sell it today you would earn a total of 128,000 from holding Capex SA or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carboclor vs. Capex SA
Performance |
| Timeline |
| Carboclor |
| Capex SA |
Carboclor and Capex SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carboclor and Capex SA
The main advantage of trading using opposite Carboclor and Capex SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carboclor position performs unexpectedly, Capex SA 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 Capex SA will offset losses from the drop in Capex SA's long position.| Carboclor vs. Capex SA | Carboclor vs. Fiplasto SA | Carboclor vs. Pampa Energia SA | Carboclor vs. Agrometal SAI |
| Capex SA vs. Inversora Juramento SA | Capex SA vs. YPF SA D | Capex SA vs. Compania de Transporte | Capex SA vs. Carboclor |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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