Correlation Between Ledesma SAAI and Molinos Agro
Can any of the company-specific risk be diversified away by investing in both Ledesma SAAI and Molinos Agro 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 Molinos Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ledesma SAAI and Molinos Agro SA, you can compare the effects of market volatilities on Ledesma SAAI and Molinos Agro 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 Molinos Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ledesma SAAI and Molinos Agro.
Diversification Opportunities for Ledesma SAAI and Molinos Agro
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ledesma and Molinos is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ledesma SAAI and Molinos Agro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molinos Agro 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 Molinos Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molinos Agro SA has no effect on the direction of Ledesma SAAI i.e., Ledesma SAAI and Molinos Agro go up and down completely randomly.
Pair Corralation between Ledesma SAAI and Molinos Agro
Assuming the 90 days trading horizon Ledesma SAAI is expected to generate 13.56 times less return on investment than Molinos Agro. But when comparing it to its historical volatility, Ledesma SAAI is 2.4 times less risky than Molinos Agro. It trades about 0.02 of its potential returns per unit of risk. Molinos Agro SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,980,000 in Molinos Agro SA on November 2, 2024 and sell it today you would earn a total of 280,000 from holding Molinos Agro SA or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ledesma SAAI vs. Molinos Agro SA
Performance |
| Timeline |
| Ledesma SAAI |
| Molinos Agro SA |
Ledesma SAAI and Molinos Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ledesma SAAI and Molinos Agro
The main advantage of trading using opposite Ledesma SAAI and Molinos Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ledesma SAAI position performs unexpectedly, Molinos Agro 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 Molinos Agro will offset losses from the drop in Molinos Agro's long position.| Ledesma SAAI vs. Harmony Gold Mining | Ledesma SAAI vs. Agrometal SAI | Ledesma SAAI vs. United States Steel | Ledesma SAAI vs. Compania de Transporte |
| Molinos Agro vs. Harmony Gold Mining | Molinos Agro vs. Compania de Transporte | Molinos Agro vs. Agrometal SAI |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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