Correlation Between Fomento De and Acciona
Can any of the company-specific risk be diversified away by investing in both Fomento De and Acciona 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 Fomento De and Acciona into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fomento de Construcciones and Acciona, you can compare the effects of market volatilities on Fomento De and Acciona 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 Fomento De with a short position of Acciona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento De and Acciona.
Diversification Opportunities for Fomento De and Acciona
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fomento and Acciona is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fomento de Construcciones and Acciona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acciona and Fomento De 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 Fomento de Construcciones are associated (or correlated) with Acciona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acciona has no effect on the direction of Fomento De i.e., Fomento De and Acciona go up and down completely randomly.
Pair Corralation between Fomento De and Acciona
Assuming the 90 days trading horizon Fomento de Construcciones is expected to generate 0.74 times more return on investment than Acciona. However, Fomento de Construcciones is 1.35 times less risky than Acciona. It trades about 0.11 of its potential returns per unit of risk. Acciona is currently generating about 0.01 per unit of risk. If you would invest 872.00 in Fomento de Construcciones on August 31, 2024 and sell it today you would earn a total of 38.00 from holding Fomento de Construcciones or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fomento de Construcciones vs. Acciona
Performance |
| Timeline |
| Fomento de Construcciones |
| Acciona |
Fomento De and Acciona Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento De and Acciona
The main advantage of trading using opposite Fomento De and Acciona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento De position performs unexpectedly, Acciona 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 Acciona will offset losses from the drop in Acciona's long position.| Fomento De vs. Ferrovial | Fomento De vs. ACS Actividades de | Fomento De vs. Acciona | Fomento De vs. Indra A |
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.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |