Correlation Between Libertas 7 and Grifols SA
Can any of the company-specific risk be diversified away by investing in both Libertas 7 and Grifols 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 Libertas 7 and Grifols SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libertas 7 SA and Grifols SA, you can compare the effects of market volatilities on Libertas 7 and Grifols 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 Libertas 7 with a short position of Grifols SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libertas 7 and Grifols SA.
Diversification Opportunities for Libertas 7 and Grifols SA
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Libertas and Grifols is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Libertas 7 SA and Grifols SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grifols SA and Libertas 7 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 Libertas 7 SA are associated (or correlated) with Grifols SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grifols SA has no effect on the direction of Libertas 7 i.e., Libertas 7 and Grifols SA go up and down completely randomly.
Pair Corralation between Libertas 7 and Grifols SA
Assuming the 90 days trading horizon Libertas 7 SA is expected to generate 1.42 times more return on investment than Grifols SA. However, Libertas 7 is 1.42 times more volatile than Grifols SA. It trades about 0.11 of its potential returns per unit of risk. Grifols SA is currently generating about -0.11 per unit of risk. If you would invest 143.00 in Libertas 7 SA on November 2, 2024 and sell it today you would earn a total of 35.00 from holding Libertas 7 SA or generate 24.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Libertas 7 SA vs. Grifols SA
Performance |
| Timeline |
| Libertas 7 SA |
| Grifols SA |
Libertas 7 and Grifols SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libertas 7 and Grifols SA
The main advantage of trading using opposite Libertas 7 and Grifols SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libertas 7 position performs unexpectedly, Grifols 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 Grifols SA will offset losses from the drop in Grifols SA's long position.| Libertas 7 vs. Home Capital Rentals | Libertas 7 vs. Ebro Foods | Libertas 7 vs. Millenium Hotels Real | Libertas 7 vs. NH Hoteles |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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