Correlation Between Cresud SACIF and SQ Old
Can any of the company-specific risk be diversified away by investing in both Cresud SACIF and SQ Old 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 SACIF and SQ Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cresud SACIF y and SQ Old, you can compare the effects of market volatilities on Cresud SACIF and SQ Old 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 SACIF with a short position of SQ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SACIF and SQ Old.
Diversification Opportunities for Cresud SACIF and SQ Old
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cresud and SQ Old is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and SQ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SQ Old and Cresud SACIF 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 SACIF y are associated (or correlated) with SQ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SQ Old has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and SQ Old go up and down completely randomly.
Pair Corralation between Cresud SACIF and SQ Old
Assuming the 90 days horizon Cresud SACIF y is expected to generate 1.9 times more return on investment than SQ Old. However, Cresud SACIF is 1.9 times more volatile than SQ Old. It trades about 0.02 of its potential returns per unit of risk. SQ Old is currently generating about 0.02 per unit of risk. If you would invest 111.00 in Cresud SACIF y on November 3, 2024 and sell it today you would lose (1.00) from holding Cresud SACIF y or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 57.14% |
| Values | Daily Returns |
Cresud SACIF y vs. SQ Old
Performance |
| Timeline |
| Cresud SACIF y |
| SQ Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Cresud SACIF and SQ Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cresud SACIF and SQ Old
The main advantage of trading using opposite Cresud SACIF and SQ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SACIF position performs unexpectedly, SQ Old 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 SQ Old will offset losses from the drop in SQ Old's long position.| Cresud SACIF vs. Landsea Homes | Cresud SACIF vs. Canterbury Park Holding | Cresud SACIF vs. Evolv Technologies Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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