Correlation Between Mercal Inmuebles and Home Capital
Can any of the company-specific risk be diversified away by investing in both Mercal Inmuebles and Home Capital 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 Home Capital 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 Home Capital Rentals, you can compare the effects of market volatilities on Mercal Inmuebles and Home Capital 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 Home Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercal Inmuebles and Home Capital.
Diversification Opportunities for Mercal Inmuebles and Home Capital
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mercal and Home is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mercal Inmuebles Socimi and Home Capital Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Capital Rentals 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 Home Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Capital Rentals has no effect on the direction of Mercal Inmuebles i.e., Mercal Inmuebles and Home Capital go up and down completely randomly.
Pair Corralation between Mercal Inmuebles and Home Capital
Assuming the 90 days trading horizon Mercal Inmuebles Socimi is expected to generate 2.23 times more return on investment than Home Capital. However, Mercal Inmuebles is 2.23 times more volatile than Home Capital Rentals. It trades about 0.03 of its potential returns per unit of risk. Home Capital Rentals is currently generating about -0.05 per unit of risk. If you would invest 4,460 in Mercal Inmuebles Socimi on August 31, 2024 and sell it today you would earn a total of 520.00 from holding Mercal Inmuebles Socimi or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.02% |
| Values | Daily Returns |
Mercal Inmuebles Socimi vs. Home Capital Rentals
Performance |
| Timeline |
| Mercal Inmuebles Socimi |
| Home Capital Rentals |
Mercal Inmuebles and Home Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercal Inmuebles and Home Capital
The main advantage of trading using opposite Mercal Inmuebles and Home Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercal Inmuebles position performs unexpectedly, Home Capital 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 Home Capital will offset losses from the drop in Home Capital's long position.| Mercal Inmuebles vs. All Iron Re | Mercal Inmuebles vs. Caixabank SA | Mercal Inmuebles vs. Arteche Lantegi Elkartea | Mercal Inmuebles vs. Azaria Rental SOCIMI |
| Home Capital vs. Industria de Diseno | Home Capital vs. Iberdrola SA | Home Capital vs. Banco Santander | Home Capital vs. Caixabank SA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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