Correlation Between Sociedad Comercial and Cresud SA

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

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

Diversification Opportunities for Sociedad Comercial and Cresud SA

-0.11

Correlation Coefficient

Sociedad Comercial  Cresud SA

Good diversification

The 3 months correlation between Sociedad and Cresud is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sociedad Comercial del and Cresud SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SA and Sociedad Comercial 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 Comercial del are associated (or correlated) with Cresud SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SA has no effect on the direction of Sociedad Comercial i.e., Sociedad Comercial and Cresud SA go up and down completely randomly.

Pair Corralation between Sociedad Comercial and Cresud SA

Assuming the 90 days trading horizon Sociedad Comercial del is expected to generate 0.97 times more return on investment than Cresud SA. However, Sociedad Comercial del is 1.03 times less risky than Cresud SA. It trades about 0.41 of its potential returns per unit of risk. Cresud SA is currently generating about 0.21 per unit of risk. If you would invest  22,350  in Sociedad Comercial del on October 5, 2024 and sell it today you would earn a total of  4,900  from holding Sociedad Comercial del or generate 21.92% return on investment over 90 days.

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

Sociedad Comercial del  vs.  Cresud SA

Sociedad Comercial del

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sociedad Comercial del are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sociedad Comercial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cresud SA

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cresud SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sociedad Comercial and Cresud SA

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

The idea behind Sociedad Comercial del and Cresud 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.