Correlation Between Ledesma SAAI and Cresud SA
Can any of the company-specific risk be diversified away by investing in both Ledesma SAAI and Cresud 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 Ledesma SAAI and Cresud SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ledesma SAAI and Cresud SA, you can compare the effects of market volatilities on Ledesma SAAI and Cresud 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 Ledesma SAAI with a short position of Cresud SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ledesma SAAI and Cresud SA.
Diversification Opportunities for Ledesma SAAI and Cresud SA
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ledesma and Cresud is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ledesma SAAI and Cresud SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SA and Ledesma SAAI 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 Ledesma SAAI are associated (or correlated) with Cresud SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SA has no effect on the direction of Ledesma SAAI i.e., Ledesma SAAI and Cresud SA go up and down completely randomly.
Pair Corralation between Ledesma SAAI and Cresud SA
Assuming the 90 days trading horizon Ledesma SAAI is expected to under-perform the Cresud SA. But the stock apears to be less risky and, when comparing its historical volatility, Ledesma SAAI is 1.55 times less risky than Cresud SA. The stock trades about -0.08 of its potential returns per unit of risk. The Cresud SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 144,000 in Cresud SA on October 20, 2024 and sell it today you would lose (1,500) from holding Cresud SA or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ledesma SAAI vs. Cresud SA
Performance |
| Timeline |
| Ledesma SAAI |
| Cresud SA |
Ledesma SAAI and Cresud SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ledesma SAAI and Cresud SA
The main advantage of trading using opposite Ledesma SAAI and Cresud SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ledesma SAAI position performs unexpectedly, Cresud 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 Cresud SA will offset losses from the drop in Cresud SA's long position.| Ledesma SAAI vs. Molinos Agro SA | Ledesma SAAI vs. Cresud SA | Ledesma SAAI vs. San Miguel AG | Ledesma SAAI vs. Inversora Juramento SA |
| Cresud SA vs. Molinos Agro SA | Cresud SA vs. San Miguel AG | Cresud SA vs. Ledesma SAAI | Cresud SA vs. Inversora Juramento SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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