Correlation Between Cresud SACIF and Terreno Realty

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

Diversification Opportunities for Cresud SACIF and Terreno Realty

-0.41

Correlation Coefficient

Cresud SACIF  Terreno Realty

Very good diversification

The 3 months correlation between Cresud and Terreno is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Terreno Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terreno Realty 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 Terreno Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terreno Realty has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Terreno Realty go up and down completely randomly.

Pair Corralation between Cresud SACIF and Terreno Realty

Assuming the 90 days horizon Cresud SACIF is expected to generate 2.38 times less return on investment than Terreno Realty. In addition to that, Cresud SACIF is 1.74 times more volatile than Terreno Realty. It trades about 0.07 of its total potential returns per unit of risk. Terreno Realty is currently generating about 0.29 per unit of volatility. If you would invest  5,896  in Terreno Realty on October 24, 2024 and sell it today you would earn a total of  540.00  from holding Terreno Realty or generate 9.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cresud SACIF y  vs.  Terreno Realty

Cresud SACIF y

Risk-Adjusted Performance

16 of 100

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.

Terreno Realty

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Terreno Realty are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Terreno Realty is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cresud SACIF and Terreno Realty

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

The idea behind Cresud SACIF y and Terreno Realty 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.