Correlation Between Lingotes and Prim SA
Can any of the company-specific risk be diversified away by investing in both Lingotes and Prim 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 Lingotes and Prim SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lingotes and Prim SA, you can compare the effects of market volatilities on Lingotes and Prim 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 Lingotes with a short position of Prim SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingotes and Prim SA.
Diversification Opportunities for Lingotes and Prim SA
Poor diversification
The 3 months correlation between Lingotes and Prim is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lingotes and Prim SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prim SA 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 Prim SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prim SA has no effect on the direction of Lingotes i.e., Lingotes and Prim SA go up and down completely randomly.
Pair Corralation between Lingotes and Prim SA
Assuming the 90 days trading horizon Lingotes is expected to under-perform the Prim SA. In addition to that, Lingotes is 1.38 times more volatile than Prim SA. It trades about -0.01 of its total potential returns per unit of risk. Prim SA is currently generating about -0.01 per unit of volatility. If you would invest 1,081 in Prim SA on September 2, 2024 and sell it today you would lose (81.00) from holding Prim SA or give up 7.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.47% |
| Values | Daily Returns |
Lingotes vs. Prim SA
Performance |
| Timeline |
| Lingotes |
| Prim SA |
Lingotes and Prim SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lingotes and Prim SA
The main advantage of trading using opposite Lingotes and Prim SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingotes position performs unexpectedly, Prim 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 Prim SA will offset losses from the drop in Prim SA's long position.| Lingotes vs. International Consolidated Airlines | Lingotes vs. Merlin Properties SOCIMI | Lingotes vs. Aena SA | Lingotes vs. Acerinox |
| Prim SA vs. Miquel y Costas | Prim SA vs. Iberpapel Gestion SA | Prim SA vs. Faes Farma SA | Prim SA vs. Vidrala 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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