Correlation Between IBEX 35 and Brunara SA
Can any of the company-specific risk be diversified away by investing in both IBEX 35 and Brunara SA 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 Brunara SA 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 Brunara SA SICAV, you can compare the effects of market volatilities on IBEX 35 and Brunara SA 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 Brunara SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX 35 and Brunara SA.
Diversification Opportunities for IBEX 35 and Brunara SA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IBEX and Brunara is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding IBEX 35 Index and Brunara SA SICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunara SA SICAV 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 Brunara SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunara SA SICAV has no effect on the direction of IBEX 35 i.e., IBEX 35 and Brunara SA go up and down completely randomly.
Pair Corralation between IBEX 35 and Brunara SA
Assuming the 90 days trading horizon IBEX 35 Index is expected to generate 2.18 times more return on investment than Brunara SA. However, IBEX 35 is 2.18 times more volatile than Brunara SA SICAV. It trades about 0.09 of its potential returns per unit of risk. Brunara SA SICAV is currently generating about 0.11 per unit of risk. If you would invest 1,159,730 in IBEX 35 Index on September 12, 2024 and sell it today you would earn a total of 19,200 from holding IBEX 35 Index or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
IBEX 35 Index vs. Brunara SA SICAV
Performance |
| Timeline |
IBEX 35 and Brunara SA Volatility Contrast
Predicted Return Density |
| Returns |
IBEX 35 Index
Pair trading matchups for IBEX 35
Brunara SA SICAV
Pair trading matchups for Brunara SA
Pair Trading with IBEX 35 and Brunara SA
The main advantage of trading using opposite IBEX 35 and Brunara SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX 35 position performs unexpectedly, Brunara SA 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 Brunara SA will offset losses from the drop in Brunara SA's long position.| IBEX 35 vs. Technomeca Aerospace SA | IBEX 35 vs. Cellnex Telecom SA | IBEX 35 vs. Elaia Investment Spain | IBEX 35 vs. Naturhouse Health SA |
| Brunara SA vs. BK Variable Internacional | Brunara SA vs. Naranja Renta Fija | Brunara SA vs. Indexa Ms Rentabilidad | Brunara SA vs. Myinvestor Indexado Global |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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