Correlation Between Iberpapel Gestion and Faes Farma
Can any of the company-specific risk be diversified away by investing in both Iberpapel Gestion and Faes Farma 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 Iberpapel Gestion and Faes Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iberpapel Gestion SA and Faes Farma SA, you can compare the effects of market volatilities on Iberpapel Gestion and Faes Farma 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 Iberpapel Gestion with a short position of Faes Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iberpapel Gestion and Faes Farma.
Diversification Opportunities for Iberpapel Gestion and Faes Farma
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iberpapel and Faes is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Iberpapel Gestion SA and Faes Farma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faes Farma SA and Iberpapel Gestion 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 Iberpapel Gestion SA are associated (or correlated) with Faes Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faes Farma SA has no effect on the direction of Iberpapel Gestion i.e., Iberpapel Gestion and Faes Farma go up and down completely randomly.
Pair Corralation between Iberpapel Gestion and Faes Farma
Assuming the 90 days trading horizon Iberpapel Gestion is expected to generate 2.81 times less return on investment than Faes Farma. In addition to that, Iberpapel Gestion is 1.07 times more volatile than Faes Farma SA. It trades about 0.13 of its total potential returns per unit of risk. Faes Farma SA is currently generating about 0.4 per unit of volatility. If you would invest 349.00 in Faes Farma SA on November 28, 2024 and sell it today you would earn a total of 22.00 from holding Faes Farma SA or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iberpapel Gestion SA vs. Faes Farma SA
Performance |
| Timeline |
| Iberpapel Gestion |
| Faes Farma SA |
Iberpapel Gestion and Faes Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iberpapel Gestion and Faes Farma
The main advantage of trading using opposite Iberpapel Gestion and Faes Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iberpapel Gestion position performs unexpectedly, Faes Farma 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 Faes Farma will offset losses from the drop in Faes Farma's long position.| Iberpapel Gestion vs. Miquel y Costas | Iberpapel Gestion vs. Vidrala SA | Iberpapel Gestion vs. Grupo Catalana Occidente | Iberpapel Gestion vs. Construcciones y Auxiliar |
| Faes Farma vs. ENCE Energa y | Faes Farma vs. Almirall SA | Faes Farma vs. Viscofan | Faes Farma 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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