Correlation Between Iberdrola and Clinica Baviera
Can any of the company-specific risk be diversified away by investing in both Iberdrola and Clinica Baviera 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 Iberdrola and Clinica Baviera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iberdrola SA and Clinica Baviera, you can compare the effects of market volatilities on Iberdrola and Clinica Baviera 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 Iberdrola with a short position of Clinica Baviera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iberdrola and Clinica Baviera.
Diversification Opportunities for Iberdrola and Clinica Baviera
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Iberdrola and Clinica is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Iberdrola SA and Clinica Baviera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinica Baviera and Iberdrola 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 Iberdrola SA are associated (or correlated) with Clinica Baviera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinica Baviera has no effect on the direction of Iberdrola i.e., Iberdrola and Clinica Baviera go up and down completely randomly.
Pair Corralation between Iberdrola and Clinica Baviera
Assuming the 90 days trading horizon Iberdrola SA is expected to generate 0.51 times more return on investment than Clinica Baviera. However, Iberdrola SA is 1.97 times less risky than Clinica Baviera. It trades about -0.04 of its potential returns per unit of risk. Clinica Baviera is currently generating about -0.05 per unit of risk. If you would invest 1,365 in Iberdrola SA on September 1, 2024 and sell it today you would lose (16.00) from holding Iberdrola SA or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Iberdrola SA vs. Clinica Baviera
Performance |
| Timeline |
| Iberdrola SA |
| Clinica Baviera |
Iberdrola and Clinica Baviera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iberdrola and Clinica Baviera
The main advantage of trading using opposite Iberdrola and Clinica Baviera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iberdrola position performs unexpectedly, Clinica Baviera 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 Clinica Baviera will offset losses from the drop in Clinica Baviera's long position.The idea behind Iberdrola SA and Clinica Baviera pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Clinica Baviera vs. Faes Farma SA | Clinica Baviera vs. Miquel y Costas | Clinica Baviera vs. Azkoyen | Clinica Baviera vs. Vidrala 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| 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 |