Correlation Between Arrienda Rental and Mapfre
Can any of the company-specific risk be diversified away by investing in both Arrienda Rental 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 Arrienda Rental and Mapfre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrienda Rental Properties and Mapfre, you can compare the effects of market volatilities on Arrienda Rental 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 Arrienda Rental with a short position of Mapfre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrienda Rental and Mapfre.
Diversification Opportunities for Arrienda Rental and Mapfre
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arrienda and Mapfre is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Arrienda Rental Properties and Mapfre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre and Arrienda Rental 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 Arrienda Rental Properties 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 Arrienda Rental i.e., Arrienda Rental and Mapfre go up and down completely randomly.
Pair Corralation between Arrienda Rental and Mapfre
Assuming the 90 days trading horizon Arrienda Rental Properties is expected to under-perform the Mapfre. But the stock apears to be less risky and, when comparing its historical volatility, Arrienda Rental Properties is 3.05 times less risky than Mapfre. The stock trades about -0.01 of its potential returns per unit of risk. The Mapfre is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 191.00 in Mapfre on September 2, 2024 and sell it today you would earn a total of 55.00 from holding Mapfre or generate 28.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Arrienda Rental Properties vs. Mapfre
Performance |
| Timeline |
| Arrienda Rental Prop |
| Mapfre |
Arrienda Rental and Mapfre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrienda Rental and Mapfre
The main advantage of trading using opposite Arrienda Rental and Mapfre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrienda Rental 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.| Arrienda Rental vs. Airbus Group SE | Arrienda Rental vs. Industria de Diseno | Arrienda Rental vs. Vale SA | Arrienda Rental vs. Iberdrola SA |
| Mapfre vs. Bankinter | Mapfre vs. Cellnex Telecom SA | Mapfre vs. Azaria Rental SOCIMI | Mapfre vs. Ebro Foods |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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