Correlation Between Home Capital and Prosegur Cash
Can any of the company-specific risk be diversified away by investing in both Home Capital and Prosegur Cash 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 Home Capital and Prosegur Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Capital Rentals and Prosegur Cash SA, you can compare the effects of market volatilities on Home Capital and Prosegur Cash 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 Home Capital with a short position of Prosegur Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Capital and Prosegur Cash.
Diversification Opportunities for Home Capital and Prosegur Cash
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and Prosegur is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Home Capital Rentals and Prosegur Cash SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosegur Cash SA and Home Capital 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 Home Capital Rentals are associated (or correlated) with Prosegur Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosegur Cash SA has no effect on the direction of Home Capital i.e., Home Capital and Prosegur Cash go up and down completely randomly.
Pair Corralation between Home Capital and Prosegur Cash
Assuming the 90 days trading horizon Home Capital Rentals is expected to under-perform the Prosegur Cash. But the stock apears to be less risky and, when comparing its historical volatility, Home Capital Rentals is 2.05 times less risky than Prosegur Cash. The stock trades about -0.01 of its potential returns per unit of risk. The Prosegur Cash SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Prosegur Cash SA on November 28, 2024 and sell it today you would earn a total of 14.00 from holding Prosegur Cash SA or generate 28.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 55.56% |
| Values | Daily Returns |
Home Capital Rentals vs. Prosegur Cash SA
Performance |
| Timeline |
| Home Capital Rentals |
| Prosegur Cash SA |
Home Capital and Prosegur Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Capital and Prosegur Cash
The main advantage of trading using opposite Home Capital and Prosegur Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Capital position performs unexpectedly, Prosegur Cash 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 Prosegur Cash will offset losses from the drop in Prosegur Cash's long position.| Home Capital vs. Media Investment Optimization | Home Capital vs. Techo Hogar SOCIMI, | Home Capital vs. Elaia Investment Spain | Home Capital vs. Azaria Rental SOCIMI |
| Prosegur Cash vs. Bankinter | Prosegur Cash vs. Biotechnology Assets SA | Prosegur Cash vs. Elaia Investment Spain | Prosegur Cash vs. Atrys Health SL |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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