Correlation Between Cresud SA and IRSA Inversiones
Can any of the company-specific risk be diversified away by investing in both Cresud SA and IRSA Inversiones 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 IRSA Inversiones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cresud SA and IRSA Inversiones y, you can compare the effects of market volatilities on Cresud SA and IRSA Inversiones 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 IRSA Inversiones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SA and IRSA Inversiones.
Diversification Opportunities for Cresud SA and IRSA Inversiones
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cresud and IRSA is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SA and IRSA Inversiones y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRSA Inversiones y 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 IRSA Inversiones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRSA Inversiones y has no effect on the direction of Cresud SA i.e., Cresud SA and IRSA Inversiones go up and down completely randomly.
Pair Corralation between Cresud SA and IRSA Inversiones
Assuming the 90 days trading horizon Cresud SA is expected to under-perform the IRSA Inversiones. In addition to that, Cresud SA is 1.03 times more volatile than IRSA Inversiones y. It trades about -0.02 of its total potential returns per unit of risk. IRSA Inversiones y is currently generating about -0.02 per unit of volatility. If you would invest 187,000 in IRSA Inversiones y on November 2, 2024 and sell it today you would lose (3,500) from holding IRSA Inversiones y or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cresud SA vs. IRSA Inversiones y
Performance |
| Timeline |
| Cresud SA |
| IRSA Inversiones y |
Cresud SA and IRSA Inversiones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cresud SA and IRSA Inversiones
The main advantage of trading using opposite Cresud SA and IRSA Inversiones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SA position performs unexpectedly, IRSA Inversiones 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 IRSA Inversiones will offset losses from the drop in IRSA Inversiones' long position.| Cresud SA vs. Agrometal SAI | Cresud SA vs. Harmony Gold Mining | Cresud SA vs. Transportadora de Gas | Cresud SA vs. Compania de Transporte |
| IRSA Inversiones vs. Agrometal SAI | IRSA Inversiones vs. Harmony Gold Mining | IRSA Inversiones vs. Telecom Argentina | IRSA Inversiones 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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