Correlation Between Mercal Inmuebles and Metrovacesa
Can any of the company-specific risk be diversified away by investing in both Mercal Inmuebles and Metrovacesa 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 Mercal Inmuebles and Metrovacesa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercal Inmuebles Socimi and Metrovacesa SA, you can compare the effects of market volatilities on Mercal Inmuebles and Metrovacesa 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 Mercal Inmuebles with a short position of Metrovacesa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercal Inmuebles and Metrovacesa.
Diversification Opportunities for Mercal Inmuebles and Metrovacesa
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercal and Metrovacesa is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mercal Inmuebles Socimi and Metrovacesa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrovacesa SA and Mercal Inmuebles 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 Mercal Inmuebles Socimi are associated (or correlated) with Metrovacesa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrovacesa SA has no effect on the direction of Mercal Inmuebles i.e., Mercal Inmuebles and Metrovacesa go up and down completely randomly.
Pair Corralation between Mercal Inmuebles and Metrovacesa
If you would invest 855.00 in Metrovacesa SA on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Metrovacesa SA or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercal Inmuebles Socimi vs. Metrovacesa SA
Performance |
| Timeline |
| Mercal Inmuebles Socimi |
| Metrovacesa SA |
Mercal Inmuebles and Metrovacesa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercal Inmuebles and Metrovacesa
The main advantage of trading using opposite Mercal Inmuebles and Metrovacesa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercal Inmuebles position performs unexpectedly, Metrovacesa 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 Metrovacesa will offset losses from the drop in Metrovacesa's long position.| Mercal Inmuebles vs. Lar Espana Real | Mercal Inmuebles vs. Metrovacesa SA | Mercal Inmuebles vs. Elecnor SA | Mercal Inmuebles vs. Mapfre |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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