Correlation Between Martifer SGPS and Benfica
Can any of the company-specific risk be diversified away by investing in both Martifer SGPS and Benfica 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 Martifer SGPS and Benfica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martifer SGPS SA and Benfica, you can compare the effects of market volatilities on Martifer SGPS and Benfica 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 Martifer SGPS with a short position of Benfica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martifer SGPS and Benfica.
Diversification Opportunities for Martifer SGPS and Benfica
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Martifer and Benfica is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Martifer SGPS SA and Benfica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benfica and Martifer SGPS 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 Martifer SGPS SA are associated (or correlated) with Benfica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benfica has no effect on the direction of Martifer SGPS i.e., Martifer SGPS and Benfica go up and down completely randomly.
Pair Corralation between Martifer SGPS and Benfica
Assuming the 90 days trading horizon Martifer SGPS is expected to generate 2.2 times less return on investment than Benfica. But when comparing it to its historical volatility, Martifer SGPS SA is 2.08 times less risky than Benfica. It trades about 0.04 of its potential returns per unit of risk. Benfica is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 300.00 in Benfica on September 3, 2024 and sell it today you would earn a total of 34.00 from holding Benfica or generate 11.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martifer SGPS SA vs. Benfica
Performance |
| Timeline |
| Martifer SGPS SA |
| Benfica |
Martifer SGPS and Benfica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martifer SGPS and Benfica
The main advantage of trading using opposite Martifer SGPS and Benfica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martifer SGPS position performs unexpectedly, Benfica 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 Benfica will offset losses from the drop in Benfica's long position.| Martifer SGPS vs. Mota Engil SGPS SA | Martifer SGPS vs. Impresa Sociedade | Martifer SGPS vs. Teixeira Duarte | Martifer SGPS vs. Altri SGPS SA |
| Benfica vs. Futebol Clube do | Benfica vs. Sporting Clube de | Benfica vs. Martifer SGPS SA | Benfica vs. Corticeira Amorim |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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