Correlation Between Concepcion Industrial and COL Financial
Can any of the company-specific risk be diversified away by investing in both Concepcion Industrial and COL Financial 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 Concepcion Industrial and COL Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concepcion Industrial Corp and COL Financial Group, you can compare the effects of market volatilities on Concepcion Industrial and COL Financial 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 Concepcion Industrial with a short position of COL Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concepcion Industrial and COL Financial.
Diversification Opportunities for Concepcion Industrial and COL Financial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Concepcion and COL is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp and COL Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Financial Group and Concepcion Industrial 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 Concepcion Industrial Corp are associated (or correlated) with COL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Financial Group has no effect on the direction of Concepcion Industrial i.e., Concepcion Industrial and COL Financial go up and down completely randomly.
Pair Corralation between Concepcion Industrial and COL Financial
Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to under-perform the COL Financial. But the stock apears to be less risky and, when comparing its historical volatility, Concepcion Industrial Corp is 1.27 times less risky than COL Financial. The stock trades about -0.08 of its potential returns per unit of risk. The COL Financial Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 158.00 in COL Financial Group on December 9, 2024 and sell it today you would earn a total of 3.00 from holding COL Financial Group or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Concepcion Industrial Corp vs. COL Financial Group
Performance |
| Timeline |
| Concepcion Industrial |
| COL Financial Group |
Concepcion Industrial and COL Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concepcion Industrial and COL Financial
The main advantage of trading using opposite Concepcion Industrial and COL Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concepcion Industrial position performs unexpectedly, COL Financial 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 COL Financial will offset losses from the drop in COL Financial's long position.| Concepcion Industrial vs. Robinsons Retail Holdings | ||
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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