Correlation Between Iberpapel Gestion and Libertas 7
Can any of the company-specific risk be diversified away by investing in both Iberpapel Gestion and Libertas 7 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 Libertas 7 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 Libertas 7 SA, you can compare the effects of market volatilities on Iberpapel Gestion and Libertas 7 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 Libertas 7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iberpapel Gestion and Libertas 7.
Diversification Opportunities for Iberpapel Gestion and Libertas 7
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Iberpapel and Libertas is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Iberpapel Gestion SA and Libertas 7 SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libertas 7 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 Libertas 7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libertas 7 SA has no effect on the direction of Iberpapel Gestion i.e., Iberpapel Gestion and Libertas 7 go up and down completely randomly.
Pair Corralation between Iberpapel Gestion and Libertas 7
Assuming the 90 days trading horizon Iberpapel Gestion is expected to generate 6.44 times less return on investment than Libertas 7. But when comparing it to its historical volatility, Iberpapel Gestion SA is 3.42 times less risky than Libertas 7. It trades about 0.1 of its potential returns per unit of risk. Libertas 7 SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 123.00 in Libertas 7 SA on September 25, 2024 and sell it today you would earn a total of 55.00 from holding Libertas 7 SA or generate 44.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Iberpapel Gestion SA vs. Libertas 7 SA
Performance |
| Timeline |
| Iberpapel Gestion |
| Libertas 7 SA |
Iberpapel Gestion and Libertas 7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iberpapel Gestion and Libertas 7
The main advantage of trading using opposite Iberpapel Gestion and Libertas 7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iberpapel Gestion position performs unexpectedly, Libertas 7 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 Libertas 7 will offset losses from the drop in Libertas 7's long position.| Iberpapel Gestion vs. Viscofan | Iberpapel Gestion vs. CIE Automotive SA | Iberpapel Gestion vs. Cia de Distribucion | Iberpapel Gestion vs. Miquel y Costas |
| Libertas 7 vs. Realia | Libertas 7 vs. Inmobiliaria del Sur | Libertas 7 vs. Montebalito SA | Libertas 7 vs. Renta Corporacion Real |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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