Correlation Between International Consolidated and Construcciones
Can any of the company-specific risk be diversified away by investing in both International Consolidated and Construcciones 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 International Consolidated and Construcciones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and Construcciones y Auxiliar, you can compare the effects of market volatilities on International Consolidated and Construcciones 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 International Consolidated with a short position of Construcciones. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Construcciones.
Diversification Opportunities for International Consolidated and Construcciones
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Construcciones is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and Construcciones y Auxiliar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construcciones y Auxiliar and International Consolidated 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 International Consolidated Airlines are associated (or correlated) with Construcciones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construcciones y Auxiliar has no effect on the direction of International Consolidated i.e., International Consolidated and Construcciones go up and down completely randomly.
Pair Corralation between International Consolidated and Construcciones
Assuming the 90 days trading horizon International Consolidated Airlines is expected to generate 1.45 times more return on investment than Construcciones. However, International Consolidated is 1.45 times more volatile than Construcciones y Auxiliar. It trades about 0.16 of its potential returns per unit of risk. Construcciones y Auxiliar is currently generating about 0.04 per unit of risk. If you would invest 172.00 in International Consolidated Airlines on October 21, 2024 and sell it today you would earn a total of 204.00 from holding International Consolidated Airlines or generate 118.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. Construcciones y Auxiliar
Performance |
| Timeline |
| International Consolidated |
| Construcciones y Auxiliar |
International Consolidated and Construcciones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Construcciones
The main advantage of trading using opposite International Consolidated and Construcciones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated position performs unexpectedly, Construcciones 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 Construcciones will offset losses from the drop in Construcciones' long position.| International Consolidated vs. Atresmedia Corporacin de | International Consolidated vs. Vytrus Biotech SA | International Consolidated vs. All Iron Re | International Consolidated vs. Naturhouse Health SA |
| Construcciones vs. Banco Santander | Construcciones vs. Telefonica | Construcciones vs. Banco Bilbao Vizcaya | Construcciones vs. Petroleo Brasileiro 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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