Correlation Between Promotora and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both Promotora and SPDR Dow 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 Promotora and SPDR Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Promotora y Operadora and SPDR Dow Jones, you can compare the effects of market volatilities on Promotora and SPDR Dow 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 Promotora with a short position of SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promotora and SPDR Dow.
Diversification Opportunities for Promotora and SPDR Dow
Very weak diversification
The 3 months correlation between Promotora and SPDR is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Promotora y Operadora and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones and Promotora 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 Promotora y Operadora are associated (or correlated) with SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of Promotora i.e., Promotora and SPDR Dow go up and down completely randomly.
Pair Corralation between Promotora and SPDR Dow
Assuming the 90 days trading horizon Promotora y Operadora is expected to generate 0.99 times more return on investment than SPDR Dow. However, Promotora y Operadora is 1.01 times less risky than SPDR Dow. It trades about 0.34 of its potential returns per unit of risk. SPDR Dow Jones is currently generating about 0.27 per unit of risk. If you would invest 17,400 in Promotora y Operadora on September 2, 2024 and sell it today you would earn a total of 2,106 from holding Promotora y Operadora or generate 12.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Promotora y Operadora vs. SPDR Dow Jones
Performance |
| Timeline |
| Promotora y Operadora |
| SPDR Dow Jones |
Promotora and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promotora and SPDR Dow
The main advantage of trading using opposite Promotora and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promotora position performs unexpectedly, SPDR Dow 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 SPDR Dow will offset losses from the drop in SPDR Dow's long position.| Promotora vs. Gruma SAB de | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del |
| SPDR Dow vs. Promotora y Operadora | SPDR Dow vs. UnitedHealth Group Incorporated | SPDR Dow vs. Qulitas Controladora SAB | SPDR Dow vs. Hoteles City Express |
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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