Correlation Between TRON and Cresud SA
Can any of the company-specific risk be diversified away by investing in both TRON and Cresud SA 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 TRON and Cresud SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRON and Cresud SA, you can compare the effects of market volatilities on TRON and Cresud SA 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 TRON with a short position of Cresud SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and Cresud SA.
Diversification Opportunities for TRON and Cresud SA
Poor diversification
The 3 months correlation between TRON and Cresud is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Cresud SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SA and TRON 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 TRON are associated (or correlated) with Cresud SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SA has no effect on the direction of TRON i.e., TRON and Cresud SA go up and down completely randomly.
Pair Corralation between TRON and Cresud SA
Assuming the 90 days trading horizon TRON is expected to generate 4.59 times more return on investment than Cresud SA. However, TRON is 4.59 times more volatile than Cresud SA. It trades about 0.08 of its potential returns per unit of risk. Cresud SA is currently generating about 0.15 per unit of risk. If you would invest 15.00 in TRON on November 2, 2024 and sell it today you would earn a total of 10.00 from holding TRON or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.2% |
| Values | Daily Returns |
TRON vs. Cresud SA
Performance |
| Timeline |
| TRON |
| Cresud SA |
TRON and Cresud SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRON and Cresud SA
The main advantage of trading using opposite TRON and Cresud SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON position performs unexpectedly, Cresud SA 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 Cresud SA will offset losses from the drop in Cresud SA's long position.The idea behind TRON and Cresud SA 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.| Cresud SA vs. Harmony Gold Mining | Cresud SA vs. United States Steel | Cresud SA vs. Transportadora de Gas | Cresud SA vs. Telecom Argentina |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |