Correlation Between Cresud SA and Walt Disney
Can any of the company-specific risk be diversified away by investing in both Cresud SA and Walt Disney 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 Cresud SA and Walt Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cresud SA and Walt Disney, you can compare the effects of market volatilities on Cresud SA and Walt Disney 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 Cresud SA with a short position of Walt Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SA and Walt Disney.
Diversification Opportunities for Cresud SA and Walt Disney
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cresud and Walt is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SA and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Cresud 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 Cresud SA are associated (or correlated) with Walt Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Cresud SA i.e., Cresud SA and Walt Disney go up and down completely randomly.
Pair Corralation between Cresud SA and Walt Disney
Assuming the 90 days trading horizon Cresud SA is expected to generate 1.44 times more return on investment than Walt Disney. However, Cresud SA is 1.44 times more volatile than Walt Disney. It trades about 0.44 of its potential returns per unit of risk. Walt Disney is currently generating about 0.36 per unit of risk. If you would invest 107,633 in Cresud SA on September 2, 2024 and sell it today you would earn a total of 29,367 from holding Cresud SA or generate 27.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cresud SA vs. Walt Disney
Performance |
| Timeline |
| Cresud SA |
| Walt Disney |
Cresud SA and Walt Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cresud SA and Walt Disney
The main advantage of trading using opposite Cresud SA and Walt Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SA position performs unexpectedly, Walt Disney 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 Walt Disney will offset losses from the drop in Walt Disney's long position.The idea behind Cresud SA and Walt Disney pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Walt Disney vs. Telecom Argentina | Walt Disney vs. American Express Co | Walt Disney vs. QUALCOMM Incorporated | Walt Disney vs. United States Steel |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |