Correlation Between Metrovacesa and Grupo Ortiz
Can any of the company-specific risk be diversified away by investing in both Metrovacesa and Grupo Ortiz 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 Grupo Ortiz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrovacesa SA and Grupo Ortiz Properties, you can compare the effects of market volatilities on Metrovacesa and Grupo Ortiz 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 Grupo Ortiz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrovacesa and Grupo Ortiz.
Diversification Opportunities for Metrovacesa and Grupo Ortiz
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metrovacesa and Grupo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Metrovacesa SA and Grupo Ortiz Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Ortiz Properties 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 Grupo Ortiz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Ortiz Properties has no effect on the direction of Metrovacesa i.e., Metrovacesa and Grupo Ortiz go up and down completely randomly.
Pair Corralation between Metrovacesa and Grupo Ortiz
Assuming the 90 days trading horizon Metrovacesa SA is expected to generate 0.82 times more return on investment than Grupo Ortiz. However, Metrovacesa SA is 1.23 times less risky than Grupo Ortiz. It trades about 0.05 of its potential returns per unit of risk. Grupo Ortiz Properties is currently generating about 0.03 per unit of risk. If you would invest 780.00 in Metrovacesa SA on August 28, 2024 and sell it today you would earn a total of 91.00 from holding Metrovacesa SA or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.38% |
| Values | Daily Returns |
Metrovacesa SA vs. Grupo Ortiz Properties
Performance |
| Timeline |
| Metrovacesa SA |
| Grupo Ortiz Properties |
Metrovacesa and Grupo Ortiz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrovacesa and Grupo Ortiz
The main advantage of trading using opposite Metrovacesa and Grupo Ortiz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrovacesa position performs unexpectedly, Grupo Ortiz 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 Grupo Ortiz will offset losses from the drop in Grupo Ortiz's long position.| Metrovacesa vs. NH Hoteles | Metrovacesa vs. Fomento de Construcciones | Metrovacesa vs. Inmobiliaria Colonial SA | Metrovacesa vs. Aedas Homes SL |
| Grupo Ortiz vs. Aedas Homes SL | Grupo Ortiz vs. Parlem Telecom Companyia | Grupo Ortiz vs. Squirrel Media SA | Grupo Ortiz vs. Caixabank 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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