Correlation Between Mapfre and Lar Espana
Can any of the company-specific risk be diversified away by investing in both Mapfre and Lar Espana 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 Lar Espana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapfre and Lar Espana Real, you can compare the effects of market volatilities on Mapfre and Lar Espana 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 Lar Espana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and Lar Espana.
Diversification Opportunities for Mapfre and Lar Espana
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mapfre and Lar is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Lar Espana Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lar Espana Real 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 Lar Espana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lar Espana Real has no effect on the direction of Mapfre i.e., Mapfre and Lar Espana go up and down completely randomly.
Pair Corralation between Mapfre and Lar Espana
Assuming the 90 days trading horizon Mapfre is expected to generate 1.29 times less return on investment than Lar Espana. But when comparing it to its historical volatility, Mapfre is 1.43 times less risky than Lar Espana. It trades about 0.09 of its potential returns per unit of risk. Lar Espana Real is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 532.00 in Lar Espana Real on August 31, 2024 and sell it today you would earn a total of 285.00 from holding Lar Espana Real or generate 53.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Mapfre vs. Lar Espana Real
Performance |
| Timeline |
| Mapfre |
| Lar Espana Real |
Mapfre and Lar Espana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapfre and Lar Espana
The main advantage of trading using opposite Mapfre and Lar Espana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapfre position performs unexpectedly, Lar Espana 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 Lar Espana will offset losses from the drop in Lar Espana's long position.The idea behind Mapfre and Lar Espana Real 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.| Lar Espana vs. Merlin Properties SOCIMI | Lar Espana vs. Inmobiliaria Colonial SA | Lar Espana vs. Cia de Distribucion | Lar Espana 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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