Correlation Between Royal Mail and Prosegur Cash
Can any of the company-specific risk be diversified away by investing in both Royal Mail and Prosegur Cash 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 Royal Mail and Prosegur Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Mail Plc and Prosegur Cash SA, you can compare the effects of market volatilities on Royal Mail and Prosegur Cash 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 Royal Mail with a short position of Prosegur Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Mail and Prosegur Cash.
Diversification Opportunities for Royal Mail and Prosegur Cash
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Royal and Prosegur is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Royal Mail Plc and Prosegur Cash SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosegur Cash SA and Royal Mail 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 Royal Mail Plc are associated (or correlated) with Prosegur Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosegur Cash SA has no effect on the direction of Royal Mail i.e., Royal Mail and Prosegur Cash go up and down completely randomly.
Pair Corralation between Royal Mail and Prosegur Cash
If you would invest 61.00 in Prosegur Cash SA on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Prosegur Cash SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Mail Plc vs. Prosegur Cash SA
Performance |
| Timeline |
| Royal Mail Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Prosegur Cash SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Royal Mail and Prosegur Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Mail and Prosegur Cash
The main advantage of trading using opposite Royal Mail and Prosegur Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Mail position performs unexpectedly, Prosegur Cash 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 Prosegur Cash will offset losses from the drop in Prosegur Cash's long position.| Royal Mail vs. Freightos Limited Ordinary | Royal Mail vs. Addentax Group Corp | Royal Mail vs. United Parcel Service | Royal Mail vs. GXO Logistics |
| Prosegur Cash vs. Freightos Limited Ordinary | Prosegur Cash vs. Addentax Group Corp | Prosegur Cash vs. Forward Air | Prosegur Cash vs. Shengfeng Development Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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