Correlation Between Prosegur Cash and Tander Inversiones

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

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

Diversification Opportunities for Prosegur Cash and Tander Inversiones

0.76

Correlation Coefficient

Prosegur Cash  Tander Inversiones

Poor diversification

The 3 months correlation between Prosegur and Tander is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Prosegur Cash SA and Tander Inversiones SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tander Inversiones SOCIMI and Prosegur Cash 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 Prosegur Cash SA are associated (or correlated) with Tander Inversiones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tander Inversiones SOCIMI has no effect on the direction of Prosegur Cash i.e., Prosegur Cash and Tander Inversiones go up and down completely randomly.

Pair Corralation between Prosegur Cash and Tander Inversiones

Assuming the 90 days trading horizon Prosegur Cash SA is expected to generate 8.36 times more return on investment than Tander Inversiones. However, Prosegur Cash is 8.36 times more volatile than Tander Inversiones SOCIMI. It trades about 0.18 of its potential returns per unit of risk. Tander Inversiones SOCIMI is currently generating about 0.13 per unit of risk. If you would invest  53.00  in Prosegur Cash SA on December 1, 2024 and sell it today you would earn a total of  11.00  from holding Prosegur Cash SA or generate 20.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Prosegur Cash SA  vs.  Tander Inversiones SOCIMI

Prosegur Cash SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prosegur Cash SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Prosegur Cash exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tander Inversiones SOCIMI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tander Inversiones SOCIMI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Tander Inversiones is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Prosegur Cash and Tander Inversiones

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

The idea behind Prosegur Cash SA and Tander Inversiones SOCIMI 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.