Correlation Between Capex SA and Sociedad Comercial

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

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

Diversification Opportunities for Capex SA and Sociedad Comercial

0.95

Correlation Coefficient

Capex SA  Sociedad Comercial

Almost no diversification

The 3 months correlation between Capex and Sociedad is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and Sociedad Comercial del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Comercial del and Capex SA 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 Capex SA are associated (or correlated) with Sociedad Comercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Comercial del has no effect on the direction of Capex SA i.e., Capex SA and Sociedad Comercial go up and down completely randomly.

Pair Corralation between Capex SA and Sociedad Comercial

Assuming the 90 days trading horizon Capex SA is expected to under-perform the Sociedad Comercial. In addition to that, Capex SA is 1.12 times more volatile than Sociedad Comercial del. It trades about -0.14 of its total potential returns per unit of risk. Sociedad Comercial del is currently generating about -0.12 per unit of volatility. If you would invest  24,850  in Sociedad Comercial del on December 30, 2024 and sell it today you would lose (6,425) from holding Sociedad Comercial del or give up 25.86% of portfolio value over 90 days.

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

Capex SA  vs.  Sociedad Comercial del

Capex SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capex SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sociedad Comercial del

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sociedad Comercial del has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Capex SA and Sociedad Comercial

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

The idea behind Capex SA and Sociedad Comercial 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.