Correlation Between Cresud SACIF and Kingboard Chemical

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

Diversification Opportunities for Cresud SACIF and Kingboard Chemical

CresudKingboardDiversified AwayCresudKingboardDiversified Away100%
0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Cresud and Kingboard is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Kingboard Chemical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingboard Chemical 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 Kingboard Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingboard Chemical has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Kingboard Chemical go up and down completely randomly.

Pair Corralation between Cresud SACIF and Kingboard Chemical

Assuming the 90 days horizon Cresud SACIF y is expected to generate 10.77 times more return on investment than Kingboard Chemical. However, Cresud SACIF is 10.77 times more volatile than Kingboard Chemical Holdings. It trades about 0.21 of its potential returns per unit of risk. Kingboard Chemical Holdings is currently generating about 0.13 per unit of risk. If you would invest  843.00  in Cresud SACIF y on October 23, 2024 and sell it today you would earn a total of  366.00  from holding Cresud SACIF y or generate 43.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Cresud SACIF y  vs.  Kingboard Chemical Holdings

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 01020304050
JavaScript chart by amCharts 3.21.15CRESY KBDCY
       Timeline  
Cresud SACIF y 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 16 (%) 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan91011121314
Kingboard Chemical 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Kingboard Chemical Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Kingboard Chemical is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan11.411.4511.511.5511.611.65

Cresud SACIF and Kingboard Chemical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.57-7.17-4.77-2.360.02.475.077.6710.2712.86 12345
JavaScript chart by amCharts 3.21.15CRESY KBDCY
       Returns  

Pair Trading with Cresud SACIF and Kingboard Chemical

The main advantage of trading using opposite Cresud SACIF and Kingboard Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SACIF position performs unexpectedly, Kingboard Chemical 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 Kingboard Chemical will offset losses from the drop in Kingboard Chemical's long position.
The idea behind Cresud SACIF y and Kingboard Chemical Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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