Correlation Between Cresud SA and Molinos Juan

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

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

Diversification Opportunities for Cresud SA and Molinos Juan

-0.02

Correlation Coefficient

Cresud SA  Molinos Juan

Good diversification

The 3 months correlation between Cresud and Molinos is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SA and Molinos Juan Semino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molinos Juan Semino and Cresud 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 Cresud SA are associated (or correlated) with Molinos Juan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molinos Juan Semino has no effect on the direction of Cresud SA i.e., Cresud SA and Molinos Juan go up and down completely randomly.

Pair Corralation between Cresud SA and Molinos Juan

Assuming the 90 days trading horizon Cresud SA is expected to generate 0.26 times more return on investment than Molinos Juan. However, Cresud SA is 3.78 times less risky than Molinos Juan. It trades about -0.06 of its potential returns per unit of risk. Molinos Juan Semino is currently generating about -0.18 per unit of risk. If you would invest  144,000  in Cresud SA on December 4, 2024 and sell it today you would lose (15,500) from holding Cresud SA or give up 10.76% of portfolio value over 90 days.

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

Cresud SA  vs.  Molinos Juan Semino

Cresud SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cresud SA 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.

Molinos Juan Semino

Risk-Adjusted Performance

Very Weak

Over the last 90 days Molinos Juan Semino 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 Cresud SA and Molinos Juan

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

The idea behind Cresud SA and Molinos Juan Semino 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.