Correlation Between SERI INDUSTRIAL and Industrias Penoles
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and Industrias Penoles 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 SERI INDUSTRIAL and Industrias Penoles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and Industrias Penoles Sab, you can compare the effects of market volatilities on SERI INDUSTRIAL and Industrias Penoles 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 SERI INDUSTRIAL with a short position of Industrias Penoles. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and Industrias Penoles.
Diversification Opportunities for SERI INDUSTRIAL and Industrias Penoles
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SERI and Industrias is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Industrias Penoles Sab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrias Penoles Sab and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO are associated (or correlated) with Industrias Penoles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrias Penoles Sab has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Industrias Penoles go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and Industrias Penoles
Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to generate 1.08 times more return on investment than Industrias Penoles. However, SERI INDUSTRIAL is 1.08 times more volatile than Industrias Penoles Sab. It trades about 0.14 of its potential returns per unit of risk. Industrias Penoles Sab is currently generating about 0.09 per unit of risk. If you would invest 234.00 in SERI INDUSTRIAL EO on October 25, 2024 and sell it today you would earn a total of 16.00 from holding SERI INDUSTRIAL EO or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. Industrias Penoles Sab
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| Industrias Penoles Sab |
SERI INDUSTRIAL and Industrias Penoles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and Industrias Penoles
The main advantage of trading using opposite SERI INDUSTRIAL and Industrias Penoles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL position performs unexpectedly, Industrias Penoles 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 Industrias Penoles will offset losses from the drop in Industrias Penoles' long position.| SERI INDUSTRIAL vs. Granite Construction | SERI INDUSTRIAL vs. Tokyu Construction Co | SERI INDUSTRIAL vs. Northern Data AG | SERI INDUSTRIAL vs. CN DATANG C |
| Industrias Penoles vs. INTERCONT HOTELS | Industrias Penoles vs. Media and Games | Industrias Penoles vs. Host Hotels Resorts | Industrias Penoles vs. Dalata Hotel Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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