Correlation Between Sociedad and Multiexport Foods

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

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

Diversification Opportunities for Sociedad and Multiexport Foods

0.0

Correlation Coefficient

Sociedad  Multiexport Foods

Pay attention - limited upside

The 3 months correlation between Sociedad and Multiexport is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sociedad De Inversiones and Multiexport Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multiexport Foods and Sociedad 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 Sociedad De Inversiones are associated (or correlated) with Multiexport Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multiexport Foods has no effect on the direction of Sociedad i.e., Sociedad and Multiexport Foods go up and down completely randomly.

Pair Corralation between Sociedad and Multiexport Foods

If you would invest  19,364  in Multiexport Foods SA on September 12, 2024 and sell it today you would earn a total of  1,036  from holding Multiexport Foods SA or generate 5.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sociedad De Inversiones  vs.  Multiexport Foods SA

Sociedad De Inversiones

Risk-Adjusted Performance

0 of 100

Very Weak

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

Multiexport Foods

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Multiexport Foods SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting essential indicators, Multiexport Foods may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sociedad and Multiexport Foods

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

The idea behind Sociedad De Inversiones and Multiexport Foods 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.