Correlation Between IBEX 35 and Entre Cua
Can any of the company-specific risk be diversified away by investing in both IBEX 35 and Entre Cua 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 Entre Cua 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 Entre Cua Socimi, you can compare the effects of market volatilities on IBEX 35 and Entre Cua 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 Entre Cua. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX 35 and Entre Cua.
Diversification Opportunities for IBEX 35 and Entre Cua
Good diversification
The 3 months correlation between IBEX and Entre is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding IBEX 35 Index and Entre Cua Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entre Cua Socimi 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 Entre Cua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entre Cua Socimi has no effect on the direction of IBEX 35 i.e., IBEX 35 and Entre Cua go up and down completely randomly.
Pair Corralation between IBEX 35 and Entre Cua
Assuming the 90 days trading horizon IBEX 35 Index is expected to generate 5.8 times more return on investment than Entre Cua. However, IBEX 35 is 5.8 times more volatile than Entre Cua Socimi. It trades about 0.06 of its potential returns per unit of risk. Entre Cua Socimi is currently generating about 0.03 per unit of risk. If you would invest 1,091,750 in IBEX 35 Index on September 3, 2024 and sell it today you would earn a total of 72,380 from holding IBEX 35 Index or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBEX 35 Index vs. Entre Cua Socimi
Performance |
| Timeline |
IBEX 35 and Entre Cua Volatility Contrast
Predicted Return Density |
| Returns |
IBEX 35 Index
Pair trading matchups for IBEX 35
Entre Cua Socimi
Pair trading matchups for Entre Cua
Pair Trading with IBEX 35 and Entre Cua
The main advantage of trading using opposite IBEX 35 and Entre Cua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX 35 position performs unexpectedly, Entre Cua 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 Entre Cua will offset losses from the drop in Entre Cua's long position.| IBEX 35 vs. All Iron Re | IBEX 35 vs. Bankinter | IBEX 35 vs. International Consolidated Airlines | IBEX 35 vs. Cellnex Telecom SA |
| Entre Cua vs. Home Capital Rentals | Entre Cua vs. All Iron Re | Entre Cua vs. Squirrel Media SA | Entre Cua vs. Caixabank 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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