Correlation Between Mapfre and ACS Actividades
Can any of the company-specific risk be diversified away by investing in both Mapfre and ACS Actividades 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 Mapfre and ACS Actividades into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapfre and ACS Actividades de, you can compare the effects of market volatilities on Mapfre and ACS Actividades 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 ACS Actividades. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and ACS Actividades.
Diversification Opportunities for Mapfre and ACS Actividades
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mapfre and ACS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and ACS Actividades de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACS Actividades de 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 ACS Actividades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACS Actividades de has no effect on the direction of Mapfre i.e., Mapfre and ACS Actividades go up and down completely randomly.
Pair Corralation between Mapfre and ACS Actividades
Assuming the 90 days trading horizon Mapfre is expected to generate 1.23 times less return on investment than ACS Actividades. In addition to that, Mapfre is 1.02 times more volatile than ACS Actividades de. It trades about 0.08 of its total potential returns per unit of risk. ACS Actividades de is currently generating about 0.1 per unit of volatility. If you would invest 2,419 in ACS Actividades de on August 24, 2024 and sell it today you would earn a total of 1,809 from holding ACS Actividades de or generate 74.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mapfre vs. ACS Actividades de
Performance |
| Timeline |
| Mapfre |
| ACS Actividades de |
Mapfre and ACS Actividades Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapfre and ACS Actividades
The main advantage of trading using opposite Mapfre and ACS Actividades positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapfre position performs unexpectedly, ACS Actividades 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 ACS Actividades will offset losses from the drop in ACS Actividades' long position.| Mapfre vs. Neinor Homes SLU | Mapfre vs. Labiana Health SA | Mapfre vs. Vytrus Biotech SA | Mapfre vs. Plasticos Compuestos SA |
| ACS Actividades vs. Mapfre | ACS Actividades vs. Enags SA | ACS Actividades vs. Ferrovial | ACS Actividades vs. Endesa 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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