Correlation Between Indra A and Mapfre
Can any of the company-specific risk be diversified away by investing in both Indra A and Mapfre 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 Indra A and Mapfre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indra A and Mapfre, you can compare the effects of market volatilities on Indra A and Mapfre 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 Indra A with a short position of Mapfre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indra A and Mapfre.
Diversification Opportunities for Indra A and Mapfre
Very good diversification
The 3 months correlation between Indra and Mapfre is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Indra A and Mapfre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre and Indra A 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 Indra A are associated (or correlated) with Mapfre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre has no effect on the direction of Indra A i.e., Indra A and Mapfre go up and down completely randomly.
Pair Corralation between Indra A and Mapfre
Assuming the 90 days trading horizon Indra A is expected to under-perform the Mapfre. But the stock apears to be less risky and, when comparing its historical volatility, Indra A is 1.46 times less risky than Mapfre. The stock trades about -0.06 of its potential returns per unit of risk. The Mapfre is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 257.00 in Mapfre on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Mapfre or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Indra A vs. Mapfre
Performance |
| Timeline |
| Indra A |
| Mapfre |
Indra A and Mapfre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indra A and Mapfre
The main advantage of trading using opposite Indra A and Mapfre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indra A position performs unexpectedly, Mapfre 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 Mapfre will offset losses from the drop in Mapfre's long position.The idea behind Indra A and Mapfre pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mapfre vs. Azaria Rental SOCIMI | Mapfre vs. Tier1 Technology SA | Mapfre vs. Cellnex Telecom SA | Mapfre vs. Atrys Health SL |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |