Correlation Between Prosegur and Construcciones
Can any of the company-specific risk be diversified away by investing in both Prosegur and Construcciones 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 Construcciones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosegur and Construcciones y Auxiliar, you can compare the effects of market volatilities on Prosegur and Construcciones 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 Construcciones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosegur and Construcciones.
Diversification Opportunities for Prosegur and Construcciones
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Prosegur and Construcciones is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Prosegur and Construcciones y Auxiliar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construcciones y Auxiliar 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 Construcciones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construcciones y Auxiliar has no effect on the direction of Prosegur i.e., Prosegur and Construcciones go up and down completely randomly.
Pair Corralation between Prosegur and Construcciones
Assuming the 90 days trading horizon Prosegur is expected to under-perform the Construcciones. In addition to that, Prosegur is 1.31 times more volatile than Construcciones y Auxiliar. It trades about 0.0 of its total potential returns per unit of risk. Construcciones y Auxiliar is currently generating about 0.05 per unit of volatility. If you would invest 2,690 in Construcciones y Auxiliar on November 2, 2024 and sell it today you would earn a total of 785.00 from holding Construcciones y Auxiliar or generate 29.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosegur vs. Construcciones y Auxiliar
Performance |
| Timeline |
| Prosegur |
| Construcciones y Auxiliar |
Prosegur and Construcciones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosegur and Construcciones
The main advantage of trading using opposite Prosegur and Construcciones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosegur position performs unexpectedly, Construcciones 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 Construcciones will offset losses from the drop in Construcciones' long position.The idea behind Prosegur and Construcciones y Auxiliar 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.| Construcciones vs. CIE Automotive SA | Construcciones vs. Talgo SA | Construcciones vs. Viscofan | Construcciones vs. Tecnicas Reunidas |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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