Correlation Between IBEX 35 and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both IBEX 35 and Neinor Homes 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 IBEX 35 and Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBEX 35 Index and Neinor Homes SLU, you can compare the effects of market volatilities on IBEX 35 and Neinor Homes 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 IBEX 35 with a short position of Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX 35 and Neinor Homes.
Diversification Opportunities for IBEX 35 and Neinor Homes
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IBEX and Neinor is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding IBEX 35 Index and Neinor Homes SLU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SLU and IBEX 35 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 IBEX 35 Index are associated (or correlated) with Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SLU has no effect on the direction of IBEX 35 i.e., IBEX 35 and Neinor Homes go up and down completely randomly.
Pair Corralation between IBEX 35 and Neinor Homes
Assuming the 90 days trading horizon IBEX 35 Index is expected to under-perform the Neinor Homes. But the index apears to be less risky and, when comparing its historical volatility, IBEX 35 Index is 1.41 times less risky than Neinor Homes. The index trades about -0.07 of its potential returns per unit of risk. The Neinor Homes SLU is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,508 in Neinor Homes SLU on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Neinor Homes SLU or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBEX 35 Index vs. Neinor Homes SLU
Performance |
| Timeline |
IBEX 35 and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
IBEX 35 Index
Pair trading matchups for IBEX 35
Neinor Homes SLU
Pair trading matchups for Neinor Homes
Pair Trading with IBEX 35 and Neinor Homes
The main advantage of trading using opposite IBEX 35 and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX 35 position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| IBEX 35 vs. Hispanotels Inversiones SOCIMI | IBEX 35 vs. Energy Solar Tech | IBEX 35 vs. All Iron Re | IBEX 35 vs. Elaia Investment Spain |
| Neinor Homes vs. International Consolidated Airlines | Neinor Homes vs. Merlin Properties SOCIMI | Neinor Homes vs. Aena SA | Neinor Homes vs. Acerinox |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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