Correlation Between Capex SA and Compania Introductora

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

By analyzing existing cross correlation between Capex SA and Compania Introductora de, you can compare the effects of market volatilities on Capex SA and Compania Introductora 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 Compania Introductora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and Compania Introductora.

Diversification Opportunities for Capex SA and Compania Introductora

0.64

Correlation Coefficient

Capex SA  Compania Introductora

Poor diversification

The 3 months correlation between Capex and Compania is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and Compania Introductora de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Introductora 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 Compania Introductora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Introductora has no effect on the direction of Capex SA i.e., Capex SA and Compania Introductora go up and down completely randomly.

Pair Corralation between Capex SA and Compania Introductora

Assuming the 90 days trading horizon Capex SA is expected to under-perform the Compania Introductora. In addition to that, Capex SA is 1.29 times more volatile than Compania Introductora de. It trades about -0.14 of its total potential returns per unit of risk. Compania Introductora de is currently generating about -0.06 per unit of volatility. If you would invest  41,000  in Compania Introductora de on December 2, 2024 and sell it today you would lose (5,100) from holding Compania Introductora de or give up 12.44% of portfolio value over 90 days.

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

Capex SA  vs.  Compania Introductora de

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.

Compania Introductora

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compania Introductora de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Capex SA and Compania Introductora

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

The idea behind Capex SA and Compania Introductora de 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.