Correlation Between International Consolidated and Nueva Expresin
Can any of the company-specific risk be diversified away by investing in both International Consolidated and Nueva Expresin 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 Nueva Expresin 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 Nueva Expresin Textil, you can compare the effects of market volatilities on International Consolidated and Nueva Expresin 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 Nueva Expresin. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Nueva Expresin.
Diversification Opportunities for International Consolidated and Nueva Expresin
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Nueva is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and Nueva Expresin Textil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nueva Expresin Textil 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 Nueva Expresin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nueva Expresin Textil has no effect on the direction of International Consolidated i.e., International Consolidated and Nueva Expresin go up and down completely randomly.
Pair Corralation between International Consolidated and Nueva Expresin
Assuming the 90 days trading horizon International Consolidated Airlines is expected to generate 1.24 times more return on investment than Nueva Expresin. However, International Consolidated is 1.24 times more volatile than Nueva Expresin Textil. It trades about 0.38 of its potential returns per unit of risk. Nueva Expresin Textil is currently generating about -0.17 per unit of risk. If you would invest 258.00 in International Consolidated Airlines on August 27, 2024 and sell it today you would earn a total of 46.00 from holding International Consolidated Airlines or generate 17.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. Nueva Expresin Textil
Performance |
| Timeline |
| International Consolidated |
| Nueva Expresin Textil |
International Consolidated and Nueva Expresin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Nueva Expresin
The main advantage of trading using opposite International Consolidated and Nueva Expresin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated position performs unexpectedly, Nueva Expresin 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 Nueva Expresin will offset losses from the drop in Nueva Expresin's long position.| International Consolidated vs. Metrovacesa SA | International Consolidated vs. Elecnor SA | International Consolidated vs. Mapfre | International Consolidated vs. Amper SA |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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