Correlation Between Inmobiliaria Colonial and Cia De

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

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

Diversification Opportunities for Inmobiliaria Colonial and Cia De

-0.81

Correlation Coefficient

Inmobiliaria Colonial  Cia De

Pay attention - limited upside

The 3 months correlation between Inmobiliaria and Cia is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Inmobiliaria Colonial SA and Cia de Distribucion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cia de Distribucion and Inmobiliaria Colonial 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 Inmobiliaria Colonial SA are associated (or correlated) with Cia De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cia de Distribucion has no effect on the direction of Inmobiliaria Colonial i.e., Inmobiliaria Colonial and Cia De go up and down completely randomly.

Pair Corralation between Inmobiliaria Colonial and Cia De

Assuming the 90 days trading horizon Inmobiliaria Colonial SA is expected to under-perform the Cia De. In addition to that, Inmobiliaria Colonial is 1.85 times more volatile than Cia de Distribucion. It trades about -0.22 of its total potential returns per unit of risk. Cia de Distribucion is currently generating about 0.11 per unit of volatility. If you would invest  2,794  in Cia de Distribucion on September 13, 2024 and sell it today you would earn a total of  150.00  from holding Cia de Distribucion or generate 5.37% return on investment over 90 days.

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

Inmobiliaria Colonial SA  vs.  Cia de Distribucion

Inmobiliaria Colonial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inmobiliaria Colonial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cia de Distribucion

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cia de Distribucion are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Cia De is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Inmobiliaria Colonial and Cia De

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

The idea behind Inmobiliaria Colonial SA and Cia de Distribucion 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.