Correlation Between Inmobiliaria Colonial and Realia
Can any of the company-specific risk be diversified away by investing in both Inmobiliaria Colonial and Realia 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 Inmobiliaria Colonial and Realia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inmobiliaria Colonial SA and Realia, you can compare the effects of market volatilities on Inmobiliaria Colonial and Realia 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 Inmobiliaria Colonial with a short position of Realia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inmobiliaria Colonial and Realia.
Diversification Opportunities for Inmobiliaria Colonial and Realia
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inmobiliaria and Realia is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Inmobiliaria Colonial SA and Realia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realia and Inmobiliaria Colonial 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 Inmobiliaria Colonial SA are associated (or correlated) with Realia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realia has no effect on the direction of Inmobiliaria Colonial i.e., Inmobiliaria Colonial and Realia go up and down completely randomly.
Pair Corralation between Inmobiliaria Colonial and Realia
Assuming the 90 days trading horizon Inmobiliaria Colonial SA is expected to under-perform the Realia. In addition to that, Inmobiliaria Colonial is 1.09 times more volatile than Realia. It trades about -0.02 of its total potential returns per unit of risk. Realia is currently generating about 0.0 per unit of volatility. If you would invest 104.00 in Realia on September 2, 2024 and sell it today you would lose (4.00) from holding Realia or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inmobiliaria Colonial SA vs. Realia
Performance |
| Timeline |
| Inmobiliaria Colonial |
| Realia |
Inmobiliaria Colonial and Realia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inmobiliaria Colonial and Realia
The main advantage of trading using opposite Inmobiliaria Colonial and Realia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inmobiliaria Colonial position performs unexpectedly, Realia 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 Realia will offset losses from the drop in Realia's long position.| Inmobiliaria Colonial vs. NH Hoteles | Inmobiliaria Colonial vs. Fomento de Construcciones | Inmobiliaria Colonial vs. Indra A |
| Realia vs. NH Hoteles | Realia vs. Fomento de Construcciones | Realia vs. Inmobiliaria Colonial SA | Realia vs. Indra A |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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