Correlation Between Cresud SACIF and Alchemy Investments

Can any of the company-specific risk be diversified away by investing in both Cresud SACIF and Alchemy Investments 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 Alchemy Investments 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 Alchemy Investments Acquisition, you can compare the effects of market volatilities on Cresud SACIF and Alchemy Investments 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 Alchemy Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SACIF and Alchemy Investments.

Diversification Opportunities for Cresud SACIF and Alchemy Investments

0.23

Correlation Coefficient

Cresud SACIF  Alchemy Investments

Modest diversification

The 3 months correlation between Cresud and Alchemy is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Alchemy Investments Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alchemy Investments 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 Alchemy Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alchemy Investments has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Alchemy Investments go up and down completely randomly.

Pair Corralation between Cresud SACIF and Alchemy Investments

Assuming the 90 days horizon Cresud SACIF y is expected to generate 14.98 times more return on investment than Alchemy Investments. However, Cresud SACIF is 14.98 times more volatile than Alchemy Investments Acquisition. It trades about -0.02 of its potential returns per unit of risk. Alchemy Investments Acquisition is currently generating about -0.38 per unit of risk. If you would invest  1,368  in Cresud SACIF y on October 8, 2024 and sell it today you would lose (24.00) from holding Cresud SACIF y or give up 1.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cresud SACIF y  vs.  Alchemy Investments Acquisitio

Cresud SACIF y

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 19 (%) 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.

Alchemy Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alchemy Investments Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Alchemy Investments is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cresud SACIF and Alchemy Investments

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

The idea behind Cresud SACIF y and Alchemy Investments Acquisition 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.

Check out your portfolio center.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.