Correlation Between Mapfre and Borges Agricultural
Can any of the company-specific risk be diversified away by investing in both Mapfre and Borges Agricultural 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 Borges Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapfre and Borges Agricultural Industrial, you can compare the effects of market volatilities on Mapfre and Borges Agricultural 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 Borges Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and Borges Agricultural.
Diversification Opportunities for Mapfre and Borges Agricultural
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mapfre and Borges is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Borges Agricultural Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borges Agricultural 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 Borges Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borges Agricultural has no effect on the direction of Mapfre i.e., Mapfre and Borges Agricultural go up and down completely randomly.
Pair Corralation between Mapfre and Borges Agricultural
Assuming the 90 days trading horizon Mapfre is expected to under-perform the Borges Agricultural. In addition to that, Mapfre is 2.25 times more volatile than Borges Agricultural Industrial. It trades about -0.21 of its total potential returns per unit of risk. Borges Agricultural Industrial is currently generating about 0.0 per unit of volatility. If you would invest 292.00 in Borges Agricultural Industrial on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Borges Agricultural Industrial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mapfre vs. Borges Agricultural Industrial
Performance |
| Timeline |
| Mapfre |
| Borges Agricultural |
Mapfre and Borges Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapfre and Borges Agricultural
The main advantage of trading using opposite Mapfre and Borges Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapfre position performs unexpectedly, Borges Agricultural 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 Borges Agricultural will offset losses from the drop in Borges Agricultural's long position.| Mapfre vs. Bankinter | Mapfre vs. Cellnex Telecom SA | Mapfre vs. Azaria Rental SOCIMI | Mapfre vs. Ebro Foods |
| Borges Agricultural vs. Lyxor UCITS Ibex35 | Borges Agricultural vs. Metrovacesa SA | Borges Agricultural vs. Hispanotels Inversiones SOCIMI | Borges Agricultural 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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