Correlation Between Cia De and Mercal Inmuebles
Can any of the company-specific risk be diversified away by investing in both Cia De and Mercal Inmuebles 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 Cia De and Mercal Inmuebles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cia de Distribucion and Mercal Inmuebles Socimi, you can compare the effects of market volatilities on Cia De and Mercal Inmuebles 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 Cia De with a short position of Mercal Inmuebles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cia De and Mercal Inmuebles.
Diversification Opportunities for Cia De and Mercal Inmuebles
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cia and Mercal is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cia de Distribucion and Mercal Inmuebles Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercal Inmuebles Socimi and Cia De 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 Cia de Distribucion are associated (or correlated) with Mercal Inmuebles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercal Inmuebles Socimi has no effect on the direction of Cia De i.e., Cia De and Mercal Inmuebles go up and down completely randomly.
Pair Corralation between Cia De and Mercal Inmuebles
Assuming the 90 days trading horizon Cia de Distribucion is expected to generate 0.38 times more return on investment than Mercal Inmuebles. However, Cia de Distribucion is 2.61 times less risky than Mercal Inmuebles. It trades about 0.09 of its potential returns per unit of risk. Mercal Inmuebles Socimi is currently generating about 0.02 per unit of risk. If you would invest 2,297 in Cia de Distribucion on September 12, 2024 and sell it today you would earn a total of 655.00 from holding Cia de Distribucion or generate 28.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 69.05% |
| Values | Daily Returns |
Cia de Distribucion vs. Mercal Inmuebles Socimi
Performance |
| Timeline |
| Cia de Distribucion |
| Mercal Inmuebles Socimi |
Cia De and Mercal Inmuebles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cia De and Mercal Inmuebles
The main advantage of trading using opposite Cia De and Mercal Inmuebles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cia De position performs unexpectedly, Mercal Inmuebles 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 Mercal Inmuebles will offset losses from the drop in Mercal Inmuebles' long position.The idea behind Cia de Distribucion and Mercal Inmuebles Socimi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mercal Inmuebles vs. Merlin Properties SOCIMI | Mercal Inmuebles vs. Inmobiliaria Colonial SA | Mercal Inmuebles vs. Cia de Distribucion | Mercal Inmuebles vs. ENCE Energa y |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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