Correlation Between Metrovacesa and Merlin Properties
Can any of the company-specific risk be diversified away by investing in both Metrovacesa and Merlin Properties 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 Merlin Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrovacesa SA and Merlin Properties SOCIMI, you can compare the effects of market volatilities on Metrovacesa and Merlin Properties 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 Merlin Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrovacesa and Merlin Properties.
Diversification Opportunities for Metrovacesa and Merlin Properties
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metrovacesa and Merlin is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Metrovacesa SA and Merlin Properties SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merlin Properties SOCIMI 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 Merlin Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merlin Properties SOCIMI has no effect on the direction of Metrovacesa i.e., Metrovacesa and Merlin Properties go up and down completely randomly.
Pair Corralation between Metrovacesa and Merlin Properties
Assuming the 90 days trading horizon Metrovacesa SA is expected to under-perform the Merlin Properties. But the stock apears to be less risky and, when comparing its historical volatility, Metrovacesa SA is 2.99 times less risky than Merlin Properties. The stock trades about -0.11 of its potential returns per unit of risk. The Merlin Properties SOCIMI is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 999.00 in Merlin Properties SOCIMI on October 22, 2024 and sell it today you would earn a total of 66.00 from holding Merlin Properties SOCIMI or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Metrovacesa SA vs. Merlin Properties SOCIMI
Performance |
| Timeline |
| Metrovacesa SA |
| Merlin Properties SOCIMI |
Metrovacesa and Merlin Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrovacesa and Merlin Properties
The main advantage of trading using opposite Metrovacesa and Merlin Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrovacesa position performs unexpectedly, Merlin Properties 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 Merlin Properties will offset losses from the drop in Merlin Properties' long position.| Metrovacesa vs. NH Hoteles | Metrovacesa vs. Fomento de Construcciones | Metrovacesa vs. Inmobiliaria Colonial SA | Metrovacesa vs. Aedas Homes SL |
| Merlin Properties vs. Elaia Investment Spain | Merlin Properties vs. Squirrel Media SA | Merlin Properties vs. All Iron Re | Merlin Properties vs. Cellnex Telecom 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |