Correlation Between Industria and Grifols SA
Can any of the company-specific risk be diversified away by investing in both Industria and Grifols 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 Industria and Grifols SA 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 Grifols SA, you can compare the effects of market volatilities on Industria and Grifols 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 Industria with a short position of Grifols SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industria and Grifols SA.
Diversification Opportunities for Industria and Grifols SA
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Industria and Grifols is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and Grifols SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grifols SA 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 Grifols SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grifols SA has no effect on the direction of Industria i.e., Industria and Grifols SA go up and down completely randomly.
Pair Corralation between Industria and Grifols SA
Assuming the 90 days trading horizon Industria de Diseno is expected to generate 0.78 times more return on investment than Grifols SA. However, Industria de Diseno is 1.27 times less risky than Grifols SA. It trades about -0.07 of its potential returns per unit of risk. Grifols SA is currently generating about -0.12 per unit of risk. If you would invest 4,944 in Industria de Diseno on October 23, 2024 and sell it today you would lose (96.00) from holding Industria de Diseno or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industria de Diseno vs. Grifols SA
Performance |
| Timeline |
| Industria de Diseno |
| Grifols SA |
Industria and Grifols SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industria and Grifols SA
The main advantage of trading using opposite Industria and Grifols SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industria position performs unexpectedly, Grifols 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 Grifols SA will offset losses from the drop in Grifols SA's long position.| Industria vs. Iberdrola SA | Industria vs. Repsol | Industria vs. Banco Santander | Industria vs. ACS Actividades de |
| Grifols SA vs. ACS Actividades de | Grifols SA vs. Acerinox | Grifols SA vs. Ferrovial | Grifols SA vs. International Consolidated Airlines |
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
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |