Correlation Between Cresud SACIF and Destinations Multi

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

Diversification Opportunities for Cresud SACIF and Destinations Multi

0.21

Correlation Coefficient

Cresud SACIF  Destinations Multi

Modest diversification

The 3 months correlation between Cresud and Destinations is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Destinations Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destinations Multi 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 Destinations Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destinations Multi has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Destinations Multi go up and down completely randomly.

Pair Corralation between Cresud SACIF and Destinations Multi

Assuming the 90 days horizon Cresud SACIF y is expected to generate 12.97 times more return on investment than Destinations Multi. However, Cresud SACIF is 12.97 times more volatile than Destinations Multi Strategy. It trades about 0.07 of its potential returns per unit of risk. Destinations Multi Strategy is currently generating about 0.12 per unit of risk. If you would invest  592.00  in Cresud SACIF y on October 5, 2024 and sell it today you would earn a total of  746.00  from holding Cresud SACIF y or generate 126.01% return on investment over 90 days.

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

Cresud SACIF y  vs.  Destinations Multi Strategy

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.

Destinations Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Destinations Multi Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Destinations Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cresud SACIF and Destinations Multi

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

The idea behind Cresud SACIF y and Destinations Multi Strategy 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 Valuation module to check real value of public entities based on technical and fundamental data.