Correlation Between Prosegur and Acerinox
Can any of the company-specific risk be diversified away by investing in both Prosegur and Acerinox 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 Prosegur and Acerinox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosegur and Acerinox, you can compare the effects of market volatilities on Prosegur and Acerinox 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 Prosegur with a short position of Acerinox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosegur and Acerinox.
Diversification Opportunities for Prosegur and Acerinox
Good diversification
The 3 months correlation between Prosegur and Acerinox is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Prosegur and Acerinox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acerinox and Prosegur 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 Prosegur are associated (or correlated) with Acerinox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acerinox has no effect on the direction of Prosegur i.e., Prosegur and Acerinox go up and down completely randomly.
Pair Corralation between Prosegur and Acerinox
Assuming the 90 days trading horizon Prosegur is expected to generate 0.82 times more return on investment than Acerinox. However, Prosegur is 1.22 times less risky than Acerinox. It trades about 0.02 of its potential returns per unit of risk. Acerinox is currently generating about 0.0 per unit of risk. If you would invest 176.00 in Prosegur on August 26, 2024 and sell it today you would earn a total of 5.00 from holding Prosegur or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosegur vs. Acerinox
Performance |
| Timeline |
| Prosegur |
| Acerinox |
Prosegur and Acerinox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosegur and Acerinox
The main advantage of trading using opposite Prosegur and Acerinox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosegur position performs unexpectedly, Acerinox 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 Acerinox will offset losses from the drop in Acerinox's long position.The idea behind Prosegur and Acerinox pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Acerinox vs. ACS Actividades de | Acerinox vs. ArcelorMittal SA | Acerinox vs. Mapfre | Acerinox vs. Ferrovial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |