Correlation Between Viscofan and Grupo Catalana
Can any of the company-specific risk be diversified away by investing in both Viscofan and Grupo Catalana 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 Viscofan and Grupo Catalana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viscofan and Grupo Catalana Occidente, you can compare the effects of market volatilities on Viscofan and Grupo Catalana 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 Viscofan with a short position of Grupo Catalana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viscofan and Grupo Catalana.
Diversification Opportunities for Viscofan and Grupo Catalana
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Viscofan and Grupo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Viscofan and Grupo Catalana Occidente in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Catalana Occidente and Viscofan 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 Viscofan are associated (or correlated) with Grupo Catalana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Catalana Occidente has no effect on the direction of Viscofan i.e., Viscofan and Grupo Catalana go up and down completely randomly.
Pair Corralation between Viscofan and Grupo Catalana
Assuming the 90 days trading horizon Viscofan is expected to generate 22.63 times less return on investment than Grupo Catalana. In addition to that, Viscofan is 1.31 times more volatile than Grupo Catalana Occidente. It trades about 0.0 of its total potential returns per unit of risk. Grupo Catalana Occidente is currently generating about 0.09 per unit of volatility. If you would invest 2,828 in Grupo Catalana Occidente on December 4, 2024 and sell it today you would earn a total of 1,232 from holding Grupo Catalana Occidente or generate 43.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viscofan vs. Grupo Catalana Occidente
Performance |
| Timeline |
| Viscofan |
| Grupo Catalana Occidente |
Viscofan and Grupo Catalana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viscofan and Grupo Catalana
The main advantage of trading using opposite Viscofan and Grupo Catalana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viscofan position performs unexpectedly, Grupo Catalana 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 Grupo Catalana will offset losses from the drop in Grupo Catalana's long position.The idea behind Viscofan and Grupo Catalana Occidente 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.| Grupo Catalana vs. Miquel y Costas | ||
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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