Correlation Between Empresa Distribuidora and TAKIX

Can any of the company-specific risk be diversified away by investing in both Empresa Distribuidora and TAKIX 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 Empresa Distribuidora and TAKIX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Empresa Distribuidora y and TAKIX, you can compare the effects of market volatilities on Empresa Distribuidora and TAKIX 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 Empresa Distribuidora with a short position of TAKIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empresa Distribuidora and TAKIX.

Diversification Opportunities for Empresa Distribuidora and TAKIX

-0.22

Correlation Coefficient

Empresa Distribuidora  TAKIX

Very good diversification

The 3 months correlation between Empresa and TAKIX is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Distribuidora y and TAKIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAKIX and Empresa Distribuidora 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 Empresa Distribuidora y are associated (or correlated) with TAKIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAKIX has no effect on the direction of Empresa Distribuidora i.e., Empresa Distribuidora and TAKIX go up and down completely randomly.

Pair Corralation between Empresa Distribuidora and TAKIX

Considering the 90-day investment horizon Empresa Distribuidora y is expected to under-perform the TAKIX. In addition to that, Empresa Distribuidora is 108.48 times more volatile than TAKIX. It trades about -0.18 of its total potential returns per unit of risk. TAKIX is currently generating about -0.41 per unit of volatility. If you would invest  858.00  in TAKIX on October 11, 2024 and sell it today you would lose (3.00) from holding TAKIX or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Empresa Distribuidora y  vs.  TAKIX

Empresa Distribuidora

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Empresa Distribuidora y are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Empresa Distribuidora displayed solid returns over the last few months and may actually be approaching a breakup point.

TAKIX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TAKIX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, TAKIX is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Empresa Distribuidora and TAKIX

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

The idea behind Empresa Distribuidora y and TAKIX 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.