Correlation Between Molinos Agro and Distribuidora
Can any of the company-specific risk be diversified away by investing in both Molinos Agro and Distribuidora 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 Molinos Agro and Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molinos Agro SA and Distribuidora de Gas, you can compare the effects of market volatilities on Molinos Agro and Distribuidora 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 Molinos Agro with a short position of Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molinos Agro and Distribuidora.
Diversification Opportunities for Molinos Agro and Distribuidora
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molinos and Distribuidora is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Molinos Agro SA and Distribuidora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distribuidora de Gas and Molinos Agro 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 Molinos Agro SA are associated (or correlated) with Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distribuidora de Gas has no effect on the direction of Molinos Agro i.e., Molinos Agro and Distribuidora go up and down completely randomly.
Pair Corralation between Molinos Agro and Distribuidora
Assuming the 90 days trading horizon Molinos Agro SA is expected to generate 1.86 times more return on investment than Distribuidora. However, Molinos Agro is 1.86 times more volatile than Distribuidora de Gas. It trades about 0.09 of its potential returns per unit of risk. Distribuidora de Gas is currently generating about -0.11 per unit of risk. If you would invest 2,560,000 in Molinos Agro SA on October 20, 2024 and sell it today you would earn a total of 215,000 from holding Molinos Agro SA or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Molinos Agro SA vs. Distribuidora de Gas
Performance |
| Timeline |
| Molinos Agro SA |
| Distribuidora de Gas |
Molinos Agro and Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molinos Agro and Distribuidora
The main advantage of trading using opposite Molinos Agro and Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molinos Agro position performs unexpectedly, Distribuidora 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 Distribuidora will offset losses from the drop in Distribuidora's long position.| Molinos Agro vs. Cresud SA | Molinos Agro vs. San Miguel AG | Molinos Agro vs. Ledesma SAAI | Molinos Agro vs. Inversora Juramento SA |
| Distribuidora vs. Naturgy BAN SA | Distribuidora vs. Transportadora de Gas | Distribuidora vs. Walmart | Distribuidora vs. Central Puerto 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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