Correlation Between Grupo Empresarial and Ercros
Can any of the company-specific risk be diversified away by investing in both Grupo Empresarial and Ercros 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 Grupo Empresarial and Ercros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Empresarial San and Ercros, you can compare the effects of market volatilities on Grupo Empresarial and Ercros 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 Grupo Empresarial with a short position of Ercros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Empresarial and Ercros.
Diversification Opportunities for Grupo Empresarial and Ercros
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Ercros is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Empresarial San and Ercros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ercros and Grupo Empresarial 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 Grupo Empresarial San are associated (or correlated) with Ercros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ercros has no effect on the direction of Grupo Empresarial i.e., Grupo Empresarial and Ercros go up and down completely randomly.
Pair Corralation between Grupo Empresarial and Ercros
Assuming the 90 days trading horizon Grupo Empresarial San is expected to generate 0.72 times more return on investment than Ercros. However, Grupo Empresarial San is 1.38 times less risky than Ercros. It trades about 0.03 of its potential returns per unit of risk. Ercros is currently generating about 0.02 per unit of risk. If you would invest 389.00 in Grupo Empresarial San on August 31, 2024 and sell it today you would earn a total of 77.00 from holding Grupo Empresarial San or generate 19.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Empresarial San vs. Ercros
Performance |
| Timeline |
| Grupo Empresarial San |
| Ercros |
Grupo Empresarial and Ercros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Empresarial and Ercros
The main advantage of trading using opposite Grupo Empresarial and Ercros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Empresarial position performs unexpectedly, Ercros 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 Ercros will offset losses from the drop in Ercros' long position.| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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