Correlation Between Pescanova and Viscofan
Can any of the company-specific risk be diversified away by investing in both Pescanova and Viscofan 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 Pescanova and Viscofan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pescanova SA and Viscofan, you can compare the effects of market volatilities on Pescanova and Viscofan 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 Pescanova with a short position of Viscofan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pescanova and Viscofan.
Diversification Opportunities for Pescanova and Viscofan
Modest diversification
The 3 months correlation between Pescanova and Viscofan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pescanova SA and Viscofan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viscofan and Pescanova 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 Pescanova SA are associated (or correlated) with Viscofan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viscofan has no effect on the direction of Pescanova i.e., Pescanova and Viscofan go up and down completely randomly.
Pair Corralation between Pescanova and Viscofan
Assuming the 90 days trading horizon Pescanova SA is expected to generate 4.56 times more return on investment than Viscofan. However, Pescanova is 4.56 times more volatile than Viscofan. It trades about 0.02 of its potential returns per unit of risk. Viscofan is currently generating about 0.01 per unit of risk. If you would invest 37.00 in Pescanova SA on August 31, 2024 and sell it today you would lose (2.00) from holding Pescanova SA or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pescanova SA vs. Viscofan
Performance |
| Timeline |
| Pescanova SA |
| Viscofan |
Pescanova and Viscofan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pescanova and Viscofan
The main advantage of trading using opposite Pescanova and Viscofan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pescanova position performs unexpectedly, Viscofan 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 Viscofan will offset losses from the drop in Viscofan's long position.| Pescanova vs. Enags SA | Pescanova vs. Mapfre | Pescanova vs. Cia de Distribucion | Pescanova vs. ACS Actividades de |
| Viscofan vs. Enags SA | Viscofan vs. Mapfre | Viscofan vs. Cia de Distribucion | Viscofan vs. ACS Actividades de |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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