Correlation Between Cresud SACIF and Key Energy

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

Diversification Opportunities for Cresud SACIF and Key Energy

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Cresud and Key is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Key Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Key Energy Services 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 Key Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Key Energy Services has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Key Energy go up and down completely randomly.

Pair Corralation between Cresud SACIF and Key Energy

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 Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy3.44%
ValuesDaily Returns

Cresud SACIF y  vs.  Key Energy Services

 Performance 
       Timeline  
Cresud SACIF y 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
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.
Key Energy Services 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Key Energy Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Key Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cresud SACIF and Key Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cresud SACIF and Key Energy

The main advantage of trading using opposite Cresud SACIF and Key Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SACIF position performs unexpectedly, Key Energy 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 Key Energy will offset losses from the drop in Key Energy's long position.
The idea behind Cresud SACIF y and Key Energy Services 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.
Check out your portfolio center.
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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