Correlation Between Elecnor SA and Pharma Mar
Can any of the company-specific risk be diversified away by investing in both Elecnor SA and Pharma Mar 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 Elecnor SA and Pharma Mar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elecnor SA and Pharma Mar SA, you can compare the effects of market volatilities on Elecnor SA and Pharma Mar 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 Elecnor SA with a short position of Pharma Mar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elecnor SA and Pharma Mar.
Diversification Opportunities for Elecnor SA and Pharma Mar
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elecnor and Pharma is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Elecnor SA and Pharma Mar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharma Mar SA and Elecnor 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 Elecnor SA are associated (or correlated) with Pharma Mar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharma Mar SA has no effect on the direction of Elecnor SA i.e., Elecnor SA and Pharma Mar go up and down completely randomly.
Pair Corralation between Elecnor SA and Pharma Mar
Assuming the 90 days trading horizon Elecnor SA is expected to generate 6.26 times less return on investment than Pharma Mar. But when comparing it to its historical volatility, Elecnor SA is 4.18 times less risky than Pharma Mar. It trades about 0.16 of its potential returns per unit of risk. Pharma Mar SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,164 in Pharma Mar SA on September 2, 2024 and sell it today you would earn a total of 3,646 from holding Pharma Mar SA or generate 87.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elecnor SA vs. Pharma Mar SA
Performance |
| Timeline |
| Elecnor SA |
| Pharma Mar SA |
Elecnor SA and Pharma Mar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elecnor SA and Pharma Mar
The main advantage of trading using opposite Elecnor SA and Pharma Mar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elecnor SA position performs unexpectedly, Pharma Mar 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 Pharma Mar will offset losses from the drop in Pharma Mar's long position.| Elecnor SA vs. Miquel y Costas | Elecnor SA vs. Construcciones y Auxiliar | Elecnor SA vs. Grupo Catalana Occidente | Elecnor SA vs. Tecnicas Reunidas |
| Pharma Mar vs. Solaria Energa y | Pharma Mar vs. Grifols SA | Pharma Mar vs. International Consolidated Airlines | Pharma Mar vs. Cellnex Telecom 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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