Correlation Between Cresud SACIF and Verra Mobility

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

Diversification Opportunities for Cresud SACIF and Verra Mobility

-0.37

Correlation Coefficient

Cresud SACIF  Verra Mobility

Very good diversification

The 3 months correlation between Cresud and Verra is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Verra Mobility Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verra Mobility Corp 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 Verra Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verra Mobility Corp has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Verra Mobility go up and down completely randomly.

Pair Corralation between Cresud SACIF and Verra Mobility

Assuming the 90 days horizon Cresud SACIF y is expected to generate 1.56 times more return on investment than Verra Mobility. However, Cresud SACIF is 1.56 times more volatile than Verra Mobility Corp. It trades about 0.18 of its potential returns per unit of risk. Verra Mobility Corp is currently generating about -0.05 per unit of risk. If you would invest  721.00  in Cresud SACIF y on October 25, 2024 and sell it today you would earn a total of  545.50  from holding Cresud SACIF y or generate 75.66% return on investment over 90 days.

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

Cresud SACIF y  vs.  Verra Mobility Corp

Cresud SACIF y

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 15 (%) 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.

Verra Mobility Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verra Mobility Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Verra Mobility 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 Verra Mobility

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

The idea behind Cresud SACIF y and Verra Mobility Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.