Correlation Between Industria and Profithol
Can any of the company-specific risk be diversified away by investing in both Industria and Profithol 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 Profithol 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 Profithol SA, you can compare the effects of market volatilities on Industria and Profithol 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 Profithol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industria and Profithol.
Diversification Opportunities for Industria and Profithol
Very good diversification
The 3 months correlation between Industria and Profithol is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and Profithol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profithol 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 Profithol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profithol SA has no effect on the direction of Industria i.e., Industria and Profithol go up and down completely randomly.
Pair Corralation between Industria and Profithol
Assuming the 90 days trading horizon Industria de Diseno is expected to under-perform the Profithol. But the stock apears to be less risky and, when comparing its historical volatility, Industria de Diseno is 11.42 times less risky than Profithol. The stock trades about -0.09 of its potential returns per unit of risk. The Profithol SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 55.00 in Profithol SA on August 31, 2024 and sell it today you would lose (5.00) from holding Profithol SA or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industria de Diseno vs. Profithol SA
Performance |
| Timeline |
| Industria de Diseno |
| Profithol SA |
Industria and Profithol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industria and Profithol
The main advantage of trading using opposite Industria and Profithol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industria position performs unexpectedly, Profithol 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 Profithol will offset losses from the drop in Profithol's long position.| Industria vs. International Consolidated Airlines | Industria vs. Merlin Properties SOCIMI | Industria vs. Aena SA | Industria vs. Acerinox |
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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 Stocks Directory module to find actively traded stocks across global markets.
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