Correlation Between Cox ABG and Industria
Can any of the company-specific risk be diversified away by investing in both Cox ABG and Industria 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 Cox ABG and Industria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cox ABG Group and Industria de Diseno, you can compare the effects of market volatilities on Cox ABG and Industria 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 Cox ABG with a short position of Industria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cox ABG and Industria.
Diversification Opportunities for Cox ABG and Industria
Modest diversification
The 3 months correlation between Cox and Industria is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cox ABG Group and Industria de Diseno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industria de Diseno and Cox ABG 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 Cox ABG Group are associated (or correlated) with Industria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industria de Diseno has no effect on the direction of Cox ABG i.e., Cox ABG and Industria go up and down completely randomly.
Pair Corralation between Cox ABG and Industria
Assuming the 90 days trading horizon Cox ABG is expected to generate 3.33 times less return on investment than Industria. But when comparing it to its historical volatility, Cox ABG Group is 1.04 times less risky than Industria. It trades about 0.05 of its potential returns per unit of risk. Industria de Diseno is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,010 in Industria de Diseno on November 29, 2024 and sell it today you would earn a total of 272.00 from holding Industria de Diseno or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cox ABG Group vs. Industria de Diseno
Performance |
| Timeline |
| Cox ABG Group |
| Industria de Diseno |
Cox ABG and Industria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cox ABG and Industria
The main advantage of trading using opposite Cox ABG and Industria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cox ABG position performs unexpectedly, Industria 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 Industria will offset losses from the drop in Industria's long position.| Cox ABG vs. Biotechnology Assets SA | Cox ABG vs. Hispanotels Inversiones SOCIMI | Cox ABG vs. Squirrel Media SA | Cox ABG vs. Borges Agricultural Industrial |
| Industria vs. Iberdrola SA | Industria vs. Repsol | Industria vs. Banco Santander | Industria vs. ACS Actividades de |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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