Correlation Between Cresud SACIF and Almacenes Xito

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

Diversification Opportunities for Cresud SACIF and Almacenes Xito

-0.74

Correlation Coefficient

Cresud SACIF  Almacenes Xito

Pay attention - limited upside

The 3 months correlation between Cresud and Almacenes is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Almacenes xito SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almacenes xito SA 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 Almacenes Xito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almacenes xito SA has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Almacenes Xito go up and down completely randomly.

Pair Corralation between Cresud SACIF and Almacenes Xito

Assuming the 90 days horizon Cresud SACIF y is expected to generate 0.55 times more return on investment than Almacenes Xito. However, Cresud SACIF y is 1.8 times less risky than Almacenes Xito. It trades about -0.02 of its potential returns per unit of risk. Almacenes xito SA is currently generating about -0.06 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cresud SACIF y  vs.  Almacenes xito SA

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.

Almacenes xito SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Almacenes xito SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cresud SACIF and Almacenes Xito

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

The idea behind Cresud SACIF y and Almacenes xito SA 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.