Correlation Between Aedifica and Banimmo SA

Can any of the company-specific risk be diversified away by investing in both Aedifica and Banimmo SA 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 Aedifica and Banimmo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aedifica and Banimmo SA, you can compare the effects of market volatilities on Aedifica and Banimmo SA 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 Aedifica with a short position of Banimmo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedifica and Banimmo SA.

Diversification Opportunities for Aedifica and Banimmo SA

0.56

Correlation Coefficient

Aedifica  Banimmo SA

Very weak diversification

The 3 months correlation between Aedifica and Banimmo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aedifica and Banimmo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banimmo SA and Aedifica 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 Aedifica are associated (or correlated) with Banimmo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banimmo SA has no effect on the direction of Aedifica i.e., Aedifica and Banimmo SA go up and down completely randomly.

Pair Corralation between Aedifica and Banimmo SA

Assuming the 90 days trading horizon Aedifica is expected to under-perform the Banimmo SA. In addition to that, Aedifica is 1.4 times more volatile than Banimmo SA. It trades about -0.08 of its total potential returns per unit of risk. Banimmo SA is currently generating about -0.06 per unit of volatility. If you would invest  306.00  in Banimmo SA on October 25, 2024 and sell it today you would lose (10.00) from holding Banimmo SA or give up 3.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aedifica  vs.  Banimmo SA

Aedifica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aedifica has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Aedifica is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Banimmo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banimmo SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Banimmo SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Aedifica and Banimmo SA

The main advantage of trading using opposite Aedifica and Banimmo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedifica position performs unexpectedly, Banimmo SA 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 Banimmo SA will offset losses from the drop in Banimmo SA's long position.

The idea behind Aedifica and Banimmo SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.