Correlation Between Arteche Lantegi and Pescanova

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

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

Diversification Opportunities for Arteche Lantegi and Pescanova

0.15

Correlation Coefficient

Arteche Lantegi  Pescanova

Average diversification

The 3 months correlation between Arteche and Pescanova is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Arteche Lantegi Elkartea and Pescanova SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pescanova SA and Arteche Lantegi 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 Arteche Lantegi Elkartea are associated (or correlated) with Pescanova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pescanova SA has no effect on the direction of Arteche Lantegi i.e., Arteche Lantegi and Pescanova go up and down completely randomly.

Pair Corralation between Arteche Lantegi and Pescanova

Assuming the 90 days trading horizon Arteche Lantegi Elkartea is expected to generate 0.38 times more return on investment than Pescanova. However, Arteche Lantegi Elkartea is 2.63 times less risky than Pescanova. It trades about 0.07 of its potential returns per unit of risk. Pescanova SA is currently generating about 0.02 per unit of risk. If you would invest  590.00  in Arteche Lantegi Elkartea on September 14, 2024 and sell it today you would earn a total of  60.00  from holding Arteche Lantegi Elkartea or generate 10.17% return on investment over 90 days.

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

Arteche Lantegi Elkartea  vs.  Pescanova SA

Arteche Lantegi Elkartea

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arteche Lantegi Elkartea are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Arteche Lantegi may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pescanova SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pescanova SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Pescanova may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Arteche Lantegi and Pescanova

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

The idea behind Arteche Lantegi Elkartea and Pescanova 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.