Correlation Between AFP Capital and Sociedad Punta

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

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

Diversification Opportunities for AFP Capital and Sociedad Punta

-0.49

Correlation Coefficient

AFP Capital  Sociedad Punta

Very good diversification

The 3 months correlation between AFP and Sociedad is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding AFP Capital SA and Sociedad Punta del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Punta del and AFP 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 AFP Capital SA are associated (or correlated) with Sociedad Punta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Punta del has no effect on the direction of AFP Capital i.e., AFP Capital and Sociedad Punta go up and down completely randomly.

Pair Corralation between AFP Capital and Sociedad Punta

If you would invest  25,000  in AFP Capital SA on September 5, 2024 and sell it today you would earn a total of  0.00  from holding AFP Capital SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	20.83%
Values	Daily Returns

AFP Capital SA  vs.  Sociedad Punta del

AFP Capital SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AFP Capital SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, AFP Capital is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Sociedad Punta del

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sociedad Punta del has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Sociedad Punta is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AFP Capital and Sociedad Punta

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

The idea behind AFP Capital SA and Sociedad Punta del 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.