Correlation Between Cresud SA and Molinos Agro
Can any of the company-specific risk be diversified away by investing in both Cresud SA and Molinos Agro 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 Molinos Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cresud SA and Molinos Agro SA, you can compare the effects of market volatilities on Cresud SA and Molinos Agro 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 Molinos Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SA and Molinos Agro.
Diversification Opportunities for Cresud SA and Molinos Agro
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cresud and Molinos is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SA and Molinos Agro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molinos Agro SA 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 Molinos Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molinos Agro SA has no effect on the direction of Cresud SA i.e., Cresud SA and Molinos Agro go up and down completely randomly.
Pair Corralation between Cresud SA and Molinos Agro
Assuming the 90 days trading horizon Cresud SA is expected to under-perform the Molinos Agro. But the stock apears to be less risky and, when comparing its historical volatility, Cresud SA is 2.32 times less risky than Molinos Agro. The stock trades about -0.01 of its potential returns per unit of risk. The Molinos Agro SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,560,000 in Molinos Agro SA on October 20, 2024 and sell it today you would earn a total of 215,000 from holding Molinos Agro SA or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cresud SA vs. Molinos Agro SA
Performance |
| Timeline |
| Cresud SA |
| Molinos Agro SA |
Cresud SA and Molinos Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cresud SA and Molinos Agro
The main advantage of trading using opposite Cresud SA and Molinos Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SA position performs unexpectedly, Molinos Agro 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 Molinos Agro will offset losses from the drop in Molinos Agro's long position.| Cresud SA vs. Molinos Agro SA | Cresud SA vs. San Miguel AG | Cresud SA vs. Ledesma SAAI | Cresud SA vs. Inversora Juramento SA |
| Molinos Agro vs. Cresud SA | Molinos Agro vs. San Miguel AG | Molinos Agro vs. Ledesma SAAI | Molinos Agro vs. Inversora Juramento SA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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