Correlation Between United States and Cresud SA
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Cresud SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Cresud SA, you can compare the effects of market volatilities on United States 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 United States with a short position of Cresud SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Cresud SA.
Diversification Opportunities for United States and Cresud SA
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Cresud is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Cresud SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SA and United States 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 United States Steel 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 United States i.e., United States and Cresud SA go up and down completely randomly.
Pair Corralation between United States and Cresud SA
Given the investment horizon of 90 days United States is expected to generate 2.52 times less return on investment than Cresud SA. In addition to that, United States is 1.43 times more volatile than Cresud SA. It trades about 0.02 of its total potential returns per unit of risk. Cresud SA is currently generating about 0.08 per unit of volatility. If you would invest 109,575 in Cresud SA on September 2, 2024 and sell it today you would earn a total of 27,425 from holding Cresud SA or generate 25.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Cresud SA
Performance |
| Timeline |
| United States Steel |
| Cresud SA |
United States and Cresud SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Cresud SA
The main advantage of trading using opposite United States and Cresud SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Transportadora de Gas | United States vs. Agrometal SAI | United States vs. Harmony Gold Mining |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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