Correlation Between Cresud SACIF and Palayan Resources

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

Diversification Opportunities for Cresud SACIF and Palayan Resources

-0.56

Correlation Coefficient

Cresud SACIF  Palayan Resources

Excellent diversification

The 3 months correlation between Cresud and Palayan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Palayan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palayan Resources 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 Palayan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palayan Resources has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Palayan Resources go up and down completely randomly.

Pair Corralation between Cresud SACIF and Palayan Resources

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 Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Cresud SACIF y  vs.  Palayan Resources

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.

Palayan Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Palayan Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Palayan Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cresud SACIF and Palayan Resources

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

The idea behind Cresud SACIF y and Palayan Resources 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.