Correlation Between Industria and Clinica Baviera
Can any of the company-specific risk be diversified away by investing in both Industria and Clinica Baviera 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 Industria and Clinica Baviera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industria de Diseno and Clinica Baviera, you can compare the effects of market volatilities on Industria and Clinica Baviera 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 Industria with a short position of Clinica Baviera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industria and Clinica Baviera.
Diversification Opportunities for Industria and Clinica Baviera
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Industria and Clinica is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and Clinica Baviera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinica Baviera and Industria 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 Industria de Diseno are associated (or correlated) with Clinica Baviera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinica Baviera has no effect on the direction of Industria i.e., Industria and Clinica Baviera go up and down completely randomly.
Pair Corralation between Industria and Clinica Baviera
Assuming the 90 days trading horizon Industria de Diseno is expected to generate 0.78 times more return on investment than Clinica Baviera. However, Industria de Diseno is 1.29 times less risky than Clinica Baviera. It trades about 0.13 of its potential returns per unit of risk. Clinica Baviera is currently generating about 0.09 per unit of risk. If you would invest 2,333 in Industria de Diseno on September 3, 2024 and sell it today you would earn a total of 2,885 from holding Industria de Diseno or generate 123.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industria de Diseno vs. Clinica Baviera
Performance |
| Timeline |
| Industria de Diseno |
| Clinica Baviera |
Industria and Clinica Baviera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industria and Clinica Baviera
The main advantage of trading using opposite Industria and Clinica Baviera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industria position performs unexpectedly, Clinica Baviera 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 Clinica Baviera will offset losses from the drop in Clinica Baviera's long position.| Industria vs. Aedas Homes SL | Industria vs. Metrovacesa SA | Industria vs. Merlin Properties SOCIMI | Industria vs. Lar Espana Real |
| Clinica Baviera vs. Miquel y Costas | Clinica Baviera vs. Azkoyen | Clinica Baviera vs. Vidrala SA | Clinica Baviera vs. Construcciones y Auxiliar |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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