Correlation Between Ercros and Grupo Empresarial
Can any of the company-specific risk be diversified away by investing in both Ercros and Grupo Empresarial 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 Ercros and Grupo Empresarial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ercros and Grupo Empresarial San, you can compare the effects of market volatilities on Ercros and Grupo Empresarial 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 Ercros with a short position of Grupo Empresarial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ercros and Grupo Empresarial.
Diversification Opportunities for Ercros and Grupo Empresarial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ercros and Grupo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ercros and Grupo Empresarial San in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Empresarial San and Ercros 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 Ercros are associated (or correlated) with Grupo Empresarial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Empresarial San has no effect on the direction of Ercros i.e., Ercros and Grupo Empresarial go up and down completely randomly.
Pair Corralation between Ercros and Grupo Empresarial
Assuming the 90 days trading horizon Ercros is expected to under-perform the Grupo Empresarial. In addition to that, Ercros is 1.52 times more volatile than Grupo Empresarial San. It trades about -0.43 of its total potential returns per unit of risk. Grupo Empresarial San is currently generating about 0.22 per unit of volatility. If you would invest 532.00 in Grupo Empresarial San on November 29, 2024 and sell it today you would earn a total of 34.00 from holding Grupo Empresarial San or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ercros vs. Grupo Empresarial San
Performance |
| Timeline |
| Ercros |
| Grupo Empresarial San |
Ercros and Grupo Empresarial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ercros and Grupo Empresarial
The main advantage of trading using opposite Ercros and Grupo Empresarial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ercros position performs unexpectedly, Grupo Empresarial 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 Grupo Empresarial will offset losses from the drop in Grupo Empresarial's long position.| Ercros vs. Amper SA | Ercros vs. ENCE Energa y | Ercros vs. Faes Farma SA | Ercros vs. Urbas Grupo Financiero |
| Grupo Empresarial vs. Ercros | Grupo Empresarial vs. Amper SA | Grupo Empresarial vs. ENCE Energa y | Grupo Empresarial vs. Faes Farma 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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