Correlation Between Mapfre and Naranja Renta
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By analyzing existing cross correlation between Mapfre and Naranja Renta Fija, you can compare the effects of market volatilities on Mapfre and Naranja Renta 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 Mapfre with a short position of Naranja Renta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and Naranja Renta.
Diversification Opportunities for Mapfre and Naranja Renta
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mapfre and Naranja is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Naranja Renta Fija in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naranja Renta Fija and Mapfre 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 Mapfre are associated (or correlated) with Naranja Renta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naranja Renta Fija has no effect on the direction of Mapfre i.e., Mapfre and Naranja Renta go up and down completely randomly.
Pair Corralation between Mapfre and Naranja Renta
Assuming the 90 days trading horizon Mapfre is expected to under-perform the Naranja Renta. In addition to that, Mapfre is 5.91 times more volatile than Naranja Renta Fija. It trades about -0.15 of its total potential returns per unit of risk. Naranja Renta Fija is currently generating about 0.37 per unit of volatility. If you would invest 5,161 in Naranja Renta Fija on September 4, 2024 and sell it today you would earn a total of 51.00 from holding Naranja Renta Fija or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.27% |
| Values | Daily Returns |
Mapfre vs. Naranja Renta Fija
Performance |
| Timeline |
| Mapfre |
| Naranja Renta Fija |
Mapfre and Naranja Renta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapfre and Naranja Renta
The main advantage of trading using opposite Mapfre and Naranja Renta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapfre position performs unexpectedly, Naranja Renta 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 Naranja Renta will offset losses from the drop in Naranja Renta's long position.The idea behind Mapfre and Naranja Renta Fija 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.| Naranja Renta vs. Metrovacesa SA | Naranja Renta vs. Endurance Motive SA | Naranja Renta vs. Elecnor SA | Naranja Renta vs. Mapfre |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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