Correlation Between Cresud SACIF and LODESTAR MIN

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

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

Diversification Opportunities for Cresud SACIF and LODESTAR MIN

0.9

Correlation Coefficient

Cresud SACIF  LODESTAR MIN

Almost no diversification

The 3 months correlation between Cresud and LODESTAR is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and LODESTAR MIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LODESTAR MIN and Cresud SACIF 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 SACIF y are associated (or correlated) with LODESTAR MIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LODESTAR MIN has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and LODESTAR MIN go up and down completely randomly.

Pair Corralation between Cresud SACIF and LODESTAR MIN

If you would invest  1,298  in Cresud SACIF y on October 5, 2024 and sell it today you would earn a total of  40.00  from holding Cresud SACIF y or generate 3.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	85.0%
Values	Daily Returns

Cresud SACIF y  vs.  LODESTAR MIN

Cresud SACIF y

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Cresud SACIF showed solid returns over the last few months and may actually be approaching a breakup point.

LODESTAR MIN

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days LODESTAR MIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather uncertain forward-looking indicators, LODESTAR MIN exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cresud SACIF and LODESTAR MIN

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

The idea behind Cresud SACIF y and LODESTAR MIN 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.