Correlation Between Renta 4 and Atresmedia Corporacin
Can any of the company-specific risk be diversified away by investing in both Renta 4 and Atresmedia Corporacin 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 Renta 4 and Atresmedia Corporacin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renta 4 Banco and Atresmedia Corporacin de, you can compare the effects of market volatilities on Renta 4 and Atresmedia Corporacin 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 Renta 4 with a short position of Atresmedia Corporacin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renta 4 and Atresmedia Corporacin.
Diversification Opportunities for Renta 4 and Atresmedia Corporacin
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Renta and Atresmedia is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Renta 4 Banco and Atresmedia Corporacin de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia Corporacin and Renta 4 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 Renta 4 Banco are associated (or correlated) with Atresmedia Corporacin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia Corporacin has no effect on the direction of Renta 4 i.e., Renta 4 and Atresmedia Corporacin go up and down completely randomly.
Pair Corralation between Renta 4 and Atresmedia Corporacin
Assuming the 90 days horizon Renta 4 Banco is expected to generate 1.16 times more return on investment than Atresmedia Corporacin. However, Renta 4 is 1.16 times more volatile than Atresmedia Corporacin de. It trades about 0.08 of its potential returns per unit of risk. Atresmedia Corporacin de is currently generating about 0.09 per unit of risk. If you would invest 996.00 in Renta 4 Banco on August 26, 2024 and sell it today you would earn a total of 294.00 from holding Renta 4 Banco or generate 29.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Renta 4 Banco vs. Atresmedia Corporacin de
Performance |
| Timeline |
| Renta 4 Banco |
| Atresmedia Corporacin |
Renta 4 and Atresmedia Corporacin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renta 4 and Atresmedia Corporacin
The main advantage of trading using opposite Renta 4 and Atresmedia Corporacin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renta 4 position performs unexpectedly, Atresmedia Corporacin 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 Atresmedia Corporacin will offset losses from the drop in Atresmedia Corporacin's long position.| Renta 4 vs. Grupo Catalana Occidente | Renta 4 vs. Miquel y Costas | Renta 4 vs. Faes Farma SA | Renta 4 vs. Azkoyen |
| Atresmedia Corporacin vs. Mapfre | Atresmedia Corporacin vs. ENCE Energa y | Atresmedia Corporacin vs. Acerinox | Atresmedia Corporacin vs. Enags SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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