Correlation Between Industria and Techo Hogar
Can any of the company-specific risk be diversified away by investing in both Industria and Techo Hogar 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 Techo Hogar 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 Techo Hogar SOCIMI,, you can compare the effects of market volatilities on Industria and Techo Hogar 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 Techo Hogar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industria and Techo Hogar.
Diversification Opportunities for Industria and Techo Hogar
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industria and Techo is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and Techo Hogar SOCIMI, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techo Hogar SOCIMI, 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 Techo Hogar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techo Hogar SOCIMI, has no effect on the direction of Industria i.e., Industria and Techo Hogar go up and down completely randomly.
Pair Corralation between Industria and Techo Hogar
Assuming the 90 days trading horizon Industria de Diseno is expected to generate 2.43 times more return on investment than Techo Hogar. However, Industria is 2.43 times more volatile than Techo Hogar SOCIMI,. It trades about 0.14 of its potential returns per unit of risk. Techo Hogar SOCIMI, is currently generating about 0.07 per unit of risk. If you would invest 5,032 in Industria de Diseno on November 3, 2024 and sell it today you would earn a total of 240.00 from holding Industria de Diseno or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Industria de Diseno vs. Techo Hogar SOCIMI,
Performance |
| Timeline |
| Industria de Diseno |
| Techo Hogar SOCIMI, |
Industria and Techo Hogar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industria and Techo Hogar
The main advantage of trading using opposite Industria and Techo Hogar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industria position performs unexpectedly, Techo Hogar 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 Techo Hogar will offset losses from the drop in Techo Hogar's long position.| Industria vs. Iberdrola SA | Industria vs. Repsol | Industria vs. Banco Santander | Industria vs. ACS Actividades de |
| Techo Hogar vs. Caixabank SA | Techo Hogar vs. Aedas Homes SL | Techo Hogar vs. Media Investment Optimization | Techo Hogar vs. Azaria Rental SOCIMI |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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