Correlation Between Cresud SACIF and IShares Regional

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

Diversification Opportunities for Cresud SACIF and IShares Regional

0.92

Correlation Coefficient

Cresud SACIF  IShares Regional

Almost no diversification

The 3 months correlation between Cresud and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and iShares Regional Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Regional Banks 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 IShares Regional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Regional Banks has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and IShares Regional go up and down completely randomly.

Pair Corralation between Cresud SACIF and IShares Regional

Assuming the 90 days horizon Cresud SACIF y is expected to generate 10.0 times more return on investment than IShares Regional. However, Cresud SACIF is 10.0 times more volatile than iShares Regional Banks. It trades about 0.02 of its potential returns per unit of risk. iShares Regional Banks is currently generating about -0.05 per unit of risk. If you would invest  1,339  in Cresud SACIF y on October 6, 2024 and sell it today you would earn a total of  5.00  from holding Cresud SACIF y or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.0%
Values	Daily Returns

Cresud SACIF y  vs.  iShares Regional Banks

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.

iShares Regional Banks

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Regional Banks are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, IShares Regional showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cresud SACIF and IShares Regional

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

The idea behind Cresud SACIF y and iShares Regional Banks 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.