Correlation Between Libertas 7 and Home Capital
Can any of the company-specific risk be diversified away by investing in both Libertas 7 and Home Capital 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 Home Capital 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 Home Capital Rentals, you can compare the effects of market volatilities on Libertas 7 and Home Capital 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 Home Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libertas 7 and Home Capital.
Diversification Opportunities for Libertas 7 and Home Capital
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Libertas and Home is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Libertas 7 SA and Home Capital Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Capital Rentals 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 Home Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Capital Rentals has no effect on the direction of Libertas 7 i.e., Libertas 7 and Home Capital go up and down completely randomly.
Pair Corralation between Libertas 7 and Home Capital
Assuming the 90 days trading horizon Libertas 7 SA is expected to generate 3.28 times more return on investment than Home Capital. However, Libertas 7 is 3.28 times more volatile than Home Capital Rentals. It trades about 0.06 of its potential returns per unit of risk. Home Capital Rentals is currently generating about -0.04 per unit of risk. If you would invest 91.00 in Libertas 7 SA on October 31, 2024 and sell it today you would earn a total of 86.00 from holding Libertas 7 SA or generate 94.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 46.96% |
| Values | Daily Returns |
Libertas 7 SA vs. Home Capital Rentals
Performance |
| Timeline |
| Libertas 7 SA |
| Home Capital Rentals |
Libertas 7 and Home Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libertas 7 and Home Capital
The main advantage of trading using opposite Libertas 7 and Home Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libertas 7 position performs unexpectedly, Home Capital 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 Home Capital will offset losses from the drop in Home Capital's long position.| Libertas 7 vs. Plasticos Compuestos SA | Libertas 7 vs. Hispanotels Inversiones SOCIMI | Libertas 7 vs. Tier1 Technology SA | Libertas 7 vs. Techo Hogar SOCIMI, |
| Home Capital vs. Elaia Investment Spain | Home Capital vs. Naturhouse Health SA | Home Capital vs. Bankinter | Home Capital vs. Techo Hogar SOCIMI, |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |