Correlation Between Cresud SACIF and Zedcor

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

Diversification Opportunities for Cresud SACIF and Zedcor

0.7

Correlation Coefficient

Cresud SACIF  Zedcor

Poor diversification

The 3 months correlation between Cresud and Zedcor is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Zedcor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedcor Inc 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 Zedcor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedcor Inc has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Zedcor go up and down completely randomly.

Pair Corralation between Cresud SACIF and Zedcor

Assuming the 90 days horizon Cresud SACIF y is expected to under-perform the Zedcor. But the stock apears to be less risky and, when comparing its historical volatility, Cresud SACIF y is 1.13 times less risky than Zedcor. The stock trades about -0.05 of its potential returns per unit of risk. The Zedcor Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  225.00  in Zedcor Inc on October 20, 2024 and sell it today you would earn a total of  5.00  from holding Zedcor Inc or generate 2.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.48%
Values	Daily Returns

Cresud SACIF y  vs.  Zedcor Inc

Cresud SACIF y

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 15 (%) 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.

Zedcor Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Zedcor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cresud SACIF and Zedcor

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

The idea behind Cresud SACIF y and Zedcor Inc 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.