Correlation Between Metrovacesa and Grifols SA
Can any of the company-specific risk be diversified away by investing in both Metrovacesa and Grifols SA 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 Metrovacesa and Grifols SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrovacesa SA and Grifols SA, you can compare the effects of market volatilities on Metrovacesa and Grifols SA 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 Metrovacesa with a short position of Grifols SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrovacesa and Grifols SA.
Diversification Opportunities for Metrovacesa and Grifols SA
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Metrovacesa and Grifols is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Metrovacesa SA and Grifols SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grifols SA and Metrovacesa 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 Metrovacesa SA are associated (or correlated) with Grifols SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grifols SA has no effect on the direction of Metrovacesa i.e., Metrovacesa and Grifols SA go up and down completely randomly.
Pair Corralation between Metrovacesa and Grifols SA
Assuming the 90 days trading horizon Metrovacesa SA is expected to generate 0.23 times more return on investment than Grifols SA. However, Metrovacesa SA is 4.27 times less risky than Grifols SA. It trades about 0.12 of its potential returns per unit of risk. Grifols SA is currently generating about -0.2 per unit of risk. If you would invest 858.00 in Metrovacesa SA on August 31, 2024 and sell it today you would earn a total of 20.00 from holding Metrovacesa SA or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metrovacesa SA vs. Grifols SA
Performance |
| Timeline |
| Metrovacesa SA |
| Grifols SA |
Metrovacesa and Grifols SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrovacesa and Grifols SA
The main advantage of trading using opposite Metrovacesa and Grifols SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrovacesa position performs unexpectedly, Grifols SA 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 Grifols SA will offset losses from the drop in Grifols SA's long position.| Metrovacesa vs. NH Hoteles | Metrovacesa vs. Fomento de Construcciones | Metrovacesa vs. Inmobiliaria Colonial SA | Metrovacesa vs. Aedas Homes SL |
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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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