Correlation Between Iberpapel Gestion and Viscofan
Can any of the company-specific risk be diversified away by investing in both Iberpapel Gestion and Viscofan 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 Viscofan 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 Viscofan, you can compare the effects of market volatilities on Iberpapel Gestion and Viscofan 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 Viscofan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iberpapel Gestion and Viscofan.
Diversification Opportunities for Iberpapel Gestion and Viscofan
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Iberpapel and Viscofan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Iberpapel Gestion SA and Viscofan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viscofan 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 Viscofan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viscofan has no effect on the direction of Iberpapel Gestion i.e., Iberpapel Gestion and Viscofan go up and down completely randomly.
Pair Corralation between Iberpapel Gestion and Viscofan
Assuming the 90 days trading horizon Iberpapel Gestion SA is expected to generate 1.13 times more return on investment than Viscofan. However, Iberpapel Gestion is 1.13 times more volatile than Viscofan. It trades about 0.07 of its potential returns per unit of risk. Viscofan is currently generating about 0.02 per unit of risk. If you would invest 1,238 in Iberpapel Gestion SA on September 13, 2024 and sell it today you would earn a total of 637.00 from holding Iberpapel Gestion SA or generate 51.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iberpapel Gestion SA vs. Viscofan
Performance |
| Timeline |
| Iberpapel Gestion |
| Viscofan |
Iberpapel Gestion and Viscofan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iberpapel Gestion and Viscofan
The main advantage of trading using opposite Iberpapel Gestion and Viscofan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iberpapel Gestion position performs unexpectedly, Viscofan 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 Viscofan will offset losses from the drop in Viscofan'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 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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