Correlation Between Borges Agricultural and Mapfre

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

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

Diversification Opportunities for Borges Agricultural and Mapfre

0.63

Correlation Coefficient

Borges Agricultural  Mapfre

Poor diversification

The 3 months correlation between Borges and Mapfre is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Borges Agricultural Industrial and Mapfre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre and Borges Agricultural 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 Borges Agricultural Industrial are associated (or correlated) with Mapfre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre has no effect on the direction of Borges Agricultural i.e., Borges Agricultural and Mapfre go up and down completely randomly.

Pair Corralation between Borges Agricultural and Mapfre

Assuming the 90 days trading horizon Borges Agricultural is expected to generate 1.24 times less return on investment than Mapfre. In addition to that, Borges Agricultural is 2.0 times more volatile than Mapfre. It trades about 0.06 of its total potential returns per unit of risk. Mapfre is currently generating about 0.16 per unit of volatility. If you would invest  219.00  in Mapfre on September 4, 2024 and sell it today you would earn a total of  27.00  from holding Mapfre or generate 12.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Borges Agricultural Industrial  vs.  Mapfre

Borges Agricultural

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Borges Agricultural Industrial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Borges Agricultural may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mapfre

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mapfre are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Mapfre may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Borges Agricultural and Mapfre

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

The idea behind Borges Agricultural Industrial and Mapfre 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.