Correlation Between Deoleo SA and Duro Felguera
Can any of the company-specific risk be diversified away by investing in both Deoleo SA and Duro Felguera 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 Deoleo SA and Duro Felguera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deoleo SA and Duro Felguera, you can compare the effects of market volatilities on Deoleo SA and Duro Felguera 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 Deoleo SA with a short position of Duro Felguera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deoleo SA and Duro Felguera.
Diversification Opportunities for Deoleo SA and Duro Felguera
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deoleo and Duro is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Deoleo SA and Duro Felguera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duro Felguera and Deoleo SA 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 Deoleo SA are associated (or correlated) with Duro Felguera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duro Felguera has no effect on the direction of Deoleo SA i.e., Deoleo SA and Duro Felguera go up and down completely randomly.
Pair Corralation between Deoleo SA and Duro Felguera
Assuming the 90 days trading horizon Deoleo SA is expected to under-perform the Duro Felguera. But the stock apears to be less risky and, when comparing its historical volatility, Deoleo SA is 4.48 times less risky than Duro Felguera. The stock trades about -0.23 of its potential returns per unit of risk. The Duro Felguera is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Duro Felguera on August 31, 2024 and sell it today you would earn a total of 13.00 from holding Duro Felguera or generate 35.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deoleo SA vs. Duro Felguera
Performance |
| Timeline |
| Deoleo SA |
| Duro Felguera |
Deoleo SA and Duro Felguera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deoleo SA and Duro Felguera
The main advantage of trading using opposite Deoleo SA and Duro Felguera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deoleo SA position performs unexpectedly, Duro Felguera 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 Duro Felguera will offset losses from the drop in Duro Felguera's long position.| Deoleo SA vs. Amper SA | Deoleo SA vs. Berkeley Energia Limited | Deoleo SA vs. Distribuidora Internacional de | Deoleo SA vs. Urbas Grupo Financiero |
| Duro Felguera vs. Home Capital Rentals | Duro Felguera vs. Aedas Homes SL | Duro Felguera vs. Arteche Lantegi Elkartea | Duro Felguera vs. Borges Agricultural Industrial |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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