Correlation Between Cresud SACIF and Park Electrochemical
Can any of the company-specific risk be diversified away by investing in both Cresud SACIF and Park Electrochemical 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 Park Electrochemical 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 Park Electrochemical, you can compare the effects of market volatilities on Cresud SACIF and Park Electrochemical 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 Park Electrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SACIF and Park Electrochemical.
Diversification Opportunities for Cresud SACIF and Park Electrochemical
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cresud and Park is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Park Electrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Electrochemical 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 Park Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Electrochemical has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Park Electrochemical go up and down completely randomly.
Pair Corralation between Cresud SACIF and Park Electrochemical
Assuming the 90 days horizon Cresud SACIF y is expected to generate 1.58 times more return on investment than Park Electrochemical. However, Cresud SACIF is 1.58 times more volatile than Park Electrochemical. It trades about -0.06 of its potential returns per unit of risk. Park Electrochemical is currently generating about -0.16 per unit of risk. If you would invest 1,379 in Cresud SACIF y on October 17, 2024 and sell it today you would lose (58.00) from holding Cresud SACIF y or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cresud SACIF y vs. Park Electrochemical
Performance |
| Timeline |
| Cresud SACIF y |
| Park Electrochemical |
Cresud SACIF and Park Electrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cresud SACIF and Park Electrochemical
The main advantage of trading using opposite Cresud SACIF and Park Electrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SACIF position performs unexpectedly, Park Electrochemical 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 Park Electrochemical will offset losses from the drop in Park Electrochemical's long position.| Cresud SACIF vs. Griffon | Cresud SACIF vs. Matthews International | Cresud SACIF vs. Valmont Industries | Cresud SACIF vs. Steel Partners Holdings |
| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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