Correlation Between Lingotes and Aedas Homes
Can any of the company-specific risk be diversified away by investing in both Lingotes and Aedas Homes 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 Lingotes and Aedas Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lingotes and Aedas Homes SL, you can compare the effects of market volatilities on Lingotes and Aedas Homes 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 Lingotes with a short position of Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingotes and Aedas Homes.
Diversification Opportunities for Lingotes and Aedas Homes
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lingotes and Aedas is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lingotes and Aedas Homes SL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SL and Lingotes 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 Lingotes are associated (or correlated) with Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SL has no effect on the direction of Lingotes i.e., Lingotes and Aedas Homes go up and down completely randomly.
Pair Corralation between Lingotes and Aedas Homes
Assuming the 90 days trading horizon Lingotes is expected to generate 5.02 times less return on investment than Aedas Homes. In addition to that, Lingotes is 1.09 times more volatile than Aedas Homes SL. It trades about 0.02 of its total potential returns per unit of risk. Aedas Homes SL is currently generating about 0.13 per unit of volatility. If you would invest 1,525 in Aedas Homes SL on September 4, 2024 and sell it today you would earn a total of 950.00 from holding Aedas Homes SL or generate 62.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.41% |
| Values | Daily Returns |
Lingotes vs. Aedas Homes SL
Performance |
| Timeline |
| Lingotes |
| Aedas Homes SL |
Lingotes and Aedas Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lingotes and Aedas Homes
The main advantage of trading using opposite Lingotes and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingotes position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.| Lingotes vs. Aedas Homes SL | Lingotes vs. Metrovacesa SA | Lingotes vs. Merlin Properties SOCIMI | Lingotes vs. Lar Espana Real |
| Aedas Homes vs. Neinor Homes SLU | Aedas Homes vs. Metrovacesa SA | Aedas Homes vs. Merlin Properties SOCIMI | Aedas Homes vs. Atresmedia Corporacin de |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stocks Directory Find actively traded stocks across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |