Correlation Between Mapfre and Arrienda Rental
Can any of the company-specific risk be diversified away by investing in both Mapfre and Arrienda Rental 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 Arrienda Rental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapfre and Arrienda Rental Properties, you can compare the effects of market volatilities on Mapfre and Arrienda Rental 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 Arrienda Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and Arrienda Rental.
Diversification Opportunities for Mapfre and Arrienda Rental
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mapfre and Arrienda is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Arrienda Rental Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrienda Rental Prop 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 Arrienda Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrienda Rental Prop has no effect on the direction of Mapfre i.e., Mapfre and Arrienda Rental go up and down completely randomly.
Pair Corralation between Mapfre and Arrienda Rental
Assuming the 90 days trading horizon Mapfre is expected to generate 3.05 times more return on investment than Arrienda Rental. However, Mapfre is 3.05 times more volatile than Arrienda Rental Properties. It trades about 0.09 of its potential returns per unit of risk. Arrienda Rental Properties is currently generating about -0.01 per unit of risk. If you would invest 191.00 in Mapfre on September 2, 2024 and sell it today you would earn a total of 55.00 from holding Mapfre or generate 28.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Mapfre vs. Arrienda Rental Properties
Performance |
| Timeline |
| Mapfre |
| Arrienda Rental Prop |
Mapfre and Arrienda Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapfre and Arrienda Rental
The main advantage of trading using opposite Mapfre and Arrienda Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapfre position performs unexpectedly, Arrienda Rental 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 Arrienda Rental will offset losses from the drop in Arrienda Rental's long position.| Mapfre vs. Bankinter | Mapfre vs. Cellnex Telecom SA | Mapfre vs. Azaria Rental SOCIMI | Mapfre vs. Ebro Foods |
| Arrienda Rental vs. Airbus Group SE | Arrienda Rental vs. Industria de Diseno | Arrienda Rental vs. Vale SA | Arrienda Rental vs. Iberdrola 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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