Correlation Between Inversora Juramento and Capex SA

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Can any of the company-specific risk be diversified away by investing in both Inversora Juramento and Capex SA 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 Inversora Juramento and Capex SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inversora Juramento SA and Capex SA, you can compare the effects of market volatilities on Inversora Juramento and Capex SA 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 Inversora Juramento with a short position of Capex SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inversora Juramento and Capex SA.

Diversification Opportunities for Inversora Juramento and Capex SA

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Inversora and Capex is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Inversora Juramento SA and Capex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capex SA and Inversora Juramento 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 Inversora Juramento SA are associated (or correlated) with Capex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capex SA has no effect on the direction of Inversora Juramento i.e., Inversora Juramento and Capex SA go up and down completely randomly.

Pair Corralation between Inversora Juramento and Capex SA

Assuming the 90 days trading horizon Inversora Juramento SA is expected to under-perform the Capex SA. But the stock apears to be less risky and, when comparing its historical volatility, Inversora Juramento SA is 1.69 times less risky than Capex SA. The stock trades about -0.18 of its potential returns per unit of risk. The Capex SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  747,000  in Capex SA on September 24, 2024 and sell it today you would earn a total of  128,000  from holding Capex SA or generate 17.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Inversora Juramento SA  vs.  Capex SA

 Performance 
       Timeline  
Inversora Juramento 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Inversora Juramento SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inversora Juramento may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Capex SA 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Capex SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Capex SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Inversora Juramento and Capex SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Inversora Juramento and Capex SA

The main advantage of trading using opposite Inversora Juramento and Capex SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inversora Juramento position performs unexpectedly, Capex SA 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 Capex SA will offset losses from the drop in Capex SA's long position.
The idea behind Inversora Juramento SA and Capex SA 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.
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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