Correlation Between Mapfre and Corporacion Financiera
Can any of the company-specific risk be diversified away by investing in both Mapfre and Corporacion Financiera 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 Corporacion Financiera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapfre and Corporacion Financiera Alba, you can compare the effects of market volatilities on Mapfre and Corporacion Financiera 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 Corporacion Financiera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and Corporacion Financiera.
Diversification Opportunities for Mapfre and Corporacion Financiera
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mapfre and Corporacion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Corporacion Financiera Alba in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion Financiera 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 Corporacion Financiera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion Financiera has no effect on the direction of Mapfre i.e., Mapfre and Corporacion Financiera go up and down completely randomly.
Pair Corralation between Mapfre and Corporacion Financiera
If you would invest 221.00 in Mapfre on September 12, 2024 and sell it today you would earn a total of 25.00 from holding Mapfre or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.54% |
| Values | Daily Returns |
Mapfre vs. Corporacion Financiera Alba
Performance |
| Timeline |
| Mapfre |
| Corporacion Financiera |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mapfre and Corporacion Financiera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapfre and Corporacion Financiera
The main advantage of trading using opposite Mapfre and Corporacion Financiera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapfre position performs unexpectedly, Corporacion Financiera 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 Corporacion Financiera will offset losses from the drop in Corporacion Financiera's long position.The idea behind Mapfre and Corporacion Financiera Alba 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.| Corporacion Financiera vs. Miquel y Costas | Corporacion Financiera vs. Grupo Catalana Occidente | Corporacion Financiera vs. Construcciones y Auxiliar | Corporacion Financiera vs. Prosegur |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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