Correlation Between SP Merval and Agrometal SAI
Can any of the company-specific risk be diversified away by investing in both SP Merval and Agrometal SAI 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 SP Merval and Agrometal SAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Merval and Agrometal SAI, you can compare the effects of market volatilities on SP Merval and Agrometal SAI 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 SP Merval with a short position of Agrometal SAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Merval and Agrometal SAI.
Diversification Opportunities for SP Merval and Agrometal SAI
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MERV and Agrometal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SP Merval and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI and SP Merval 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 SP Merval are associated (or correlated) with Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of SP Merval i.e., SP Merval and Agrometal SAI go up and down completely randomly.
Pair Corralation between SP Merval and Agrometal SAI
Assuming the 90 days trading horizon SP Merval is expected to generate 0.43 times more return on investment than Agrometal SAI. However, SP Merval is 2.3 times less risky than Agrometal SAI. It trades about 0.15 of its potential returns per unit of risk. Agrometal SAI is currently generating about 0.07 per unit of risk. If you would invest 16,809,000 in SP Merval on August 27, 2024 and sell it today you would earn a total of 83,191,000 from holding SP Merval or generate 494.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.38% |
| Values | Daily Returns |
SP Merval vs. Agrometal SAI
Performance |
| Timeline |
SP Merval and Agrometal SAI Volatility Contrast
Predicted Return Density |
| Returns |
SP Merval
Pair trading matchups for SP Merval
Agrometal SAI
Pair trading matchups for Agrometal SAI
Pair Trading with SP Merval and Agrometal SAI
The main advantage of trading using opposite SP Merval and Agrometal SAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Merval position performs unexpectedly, Agrometal SAI 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 Agrometal SAI will offset losses from the drop in Agrometal SAI's long position.| SP Merval vs. Harmony Gold Mining | SP Merval vs. United States Steel | SP Merval vs. Agrometal SAI | SP Merval vs. Compania de Transporte |
| Agrometal SAI vs. United States Steel | Agrometal SAI vs. Pfizer Inc | Agrometal SAI vs. Distribuidora de Gas | Agrometal SAI vs. IRSA Propiedades Comerciales |
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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