Correlation Between Enags SA and Mapfre
Can any of the company-specific risk be diversified away by investing in both Enags SA and Mapfre 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 Enags SA and Mapfre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enags SA and Mapfre, you can compare the effects of market volatilities on Enags SA and Mapfre 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 Enags SA with a short position of Mapfre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enags SA and Mapfre.
Diversification Opportunities for Enags SA and Mapfre
Good diversification
The 3 months correlation between Enags and Mapfre is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Enags SA and Mapfre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre and Enags 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 Enags SA are associated (or correlated) with Mapfre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre has no effect on the direction of Enags SA i.e., Enags SA and Mapfre go up and down completely randomly.
Pair Corralation between Enags SA and Mapfre
Assuming the 90 days trading horizon Enags SA is expected to generate 47.05 times less return on investment than Mapfre. But when comparing it to its historical volatility, Enags SA is 1.02 times less risky than Mapfre. It trades about 0.01 of its potential returns per unit of risk. Mapfre is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 243.00 in Mapfre on October 25, 2024 and sell it today you would earn a total of 21.00 from holding Mapfre or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enags SA vs. Mapfre
Performance |
| Timeline |
| Enags SA |
| Mapfre |
Enags SA and Mapfre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enags SA and Mapfre
The main advantage of trading using opposite Enags SA and Mapfre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enags SA position performs unexpectedly, Mapfre 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 Mapfre will offset losses from the drop in Mapfre's long position.The idea behind Enags SA and Mapfre pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mapfre vs. Atrys Health SL | Mapfre vs. Elaia Investment Spain | Mapfre vs. Millenium Hotels Real | Mapfre vs. Techo Hogar SOCIMI, |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |