Correlation Between Tubacex SA and Elaia Investment
Can any of the company-specific risk be diversified away by investing in both Tubacex SA and Elaia Investment 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 Tubacex SA and Elaia Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tubacex SA and Elaia Investment Spain, you can compare the effects of market volatilities on Tubacex SA and Elaia Investment 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 Tubacex SA with a short position of Elaia Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tubacex SA and Elaia Investment.
Diversification Opportunities for Tubacex SA and Elaia Investment
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tubacex and Elaia is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Tubacex SA and Elaia Investment Spain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elaia Investment Spain and Tubacex SA 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 Tubacex SA are associated (or correlated) with Elaia Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elaia Investment Spain has no effect on the direction of Tubacex SA i.e., Tubacex SA and Elaia Investment go up and down completely randomly.
Pair Corralation between Tubacex SA and Elaia Investment
Assuming the 90 days trading horizon Tubacex SA is expected to generate 0.44 times more return on investment than Elaia Investment. However, Tubacex SA is 2.27 times less risky than Elaia Investment. It trades about -0.03 of its potential returns per unit of risk. Elaia Investment Spain is currently generating about -0.21 per unit of risk. If you would invest 336.00 in Tubacex SA on August 29, 2024 and sell it today you would lose (6.00) from holding Tubacex SA or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tubacex SA vs. Elaia Investment Spain
Performance |
| Timeline |
| Tubacex SA |
| Elaia Investment Spain |
Tubacex SA and Elaia Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tubacex SA and Elaia Investment
The main advantage of trading using opposite Tubacex SA and Elaia Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tubacex SA position performs unexpectedly, Elaia Investment 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 Elaia Investment will offset losses from the drop in Elaia Investment's long position.| Tubacex SA vs. Elaia Investment Spain | Tubacex SA vs. Borges Agricultural Industrial | Tubacex SA vs. NH Hoteles | Tubacex SA vs. International Consolidated Airlines |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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