Correlation Between All Iron and Mapfre
Can any of the company-specific risk be diversified away by investing in both All Iron and Mapfre 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 All Iron and Mapfre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All Iron Re and Mapfre, you can compare the effects of market volatilities on All Iron and Mapfre 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 All Iron with a short position of Mapfre. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Iron and Mapfre.
Diversification Opportunities for All Iron and Mapfre
Very poor diversification
The 3 months correlation between All and Mapfre is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding All Iron Re and Mapfre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre and All Iron 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 All Iron Re are associated (or correlated) with Mapfre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre has no effect on the direction of All Iron i.e., All Iron and Mapfre go up and down completely randomly.
Pair Corralation between All Iron and Mapfre
Assuming the 90 days trading horizon All Iron Re is expected to under-perform the Mapfre. In addition to that, All Iron is 1.3 times more volatile than Mapfre. It trades about -0.18 of its total potential returns per unit of risk. Mapfre is currently generating about -0.16 per unit of volatility. If you would invest 254.00 in Mapfre on September 3, 2024 and sell it today you would lose (8.00) from holding Mapfre or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
All Iron Re vs. Mapfre
Performance |
| Timeline |
| All Iron Re |
| Mapfre |
All Iron and Mapfre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All Iron and Mapfre
The main advantage of trading using opposite All Iron and Mapfre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All Iron position performs unexpectedly, Mapfre 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 Mapfre will offset losses from the drop in Mapfre's long position.| All Iron vs. Merlin Properties SOCIMI | All Iron vs. Elaia Investment Spain | All Iron vs. Metrovacesa SA | All Iron vs. Elecnor SA |
| Mapfre vs. Caixabank SA | Mapfre vs. Atresmedia Corporacin de | Mapfre vs. Borges Agricultural Industrial | Mapfre vs. Bankinter |
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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