Correlation Between Cresud SACIF and Invesco

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

Diversification Opportunities for Cresud SACIF and Invesco

0.26

Correlation Coefficient

Cresud SACIF  Invesco

Modest diversification

The 3 months correlation between Cresud and Invesco is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Invesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco 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 Invesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Invesco go up and down completely randomly.

Pair Corralation between Cresud SACIF and Invesco

Assuming the 90 days horizon Cresud SACIF y is expected to generate 1.1 times more return on investment than Invesco. However, Cresud SACIF is 1.1 times more volatile than Invesco. It trades about -0.08 of its potential returns per unit of risk. Invesco is currently generating about -0.13 per unit of risk. If you would invest  1,293  in Cresud SACIF y on December 25, 2024 and sell it today you would lose (182.00) from holding Cresud SACIF y or give up 14.08% 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.  Invesco

Cresud SACIF y

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cresud SACIF y has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Invesco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Cresud SACIF and Invesco

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

The idea behind Cresud SACIF y and Invesco 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.