Correlation Between Empresa Distribuidora and DAIMLERCHRYSLER

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

Diversification Opportunities for Empresa Distribuidora and DAIMLERCHRYSLER

-0.48

Correlation Coefficient

Empresa Distribuidora  DAIMLERCHRYSLER

Very good diversification

The 3 months correlation between Empresa and DAIMLERCHRYSLER is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Distribuidora y and DAIMLERCHRYSLER NORTH AMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIMLERCHRYSLER NORTH 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 DAIMLERCHRYSLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIMLERCHRYSLER NORTH has no effect on the direction of Empresa Distribuidora i.e., Empresa Distribuidora and DAIMLERCHRYSLER go up and down completely randomly.

Pair Corralation between Empresa Distribuidora and DAIMLERCHRYSLER

Considering the 90-day investment horizon Empresa Distribuidora y is expected to under-perform the DAIMLERCHRYSLER. In addition to that, Empresa Distribuidora is 5.42 times more volatile than DAIMLERCHRYSLER NORTH AMER. It trades about -0.1 of its total potential returns per unit of risk. DAIMLERCHRYSLER NORTH AMER is currently generating about 0.13 per unit of volatility. If you would invest  11,687  in DAIMLERCHRYSLER NORTH AMER on December 27, 2024 and sell it today you would earn a total of  730.00  from holding DAIMLERCHRYSLER NORTH AMER or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Empresa Distribuidora y  vs.  DAIMLERCHRYSLER NORTH AMER

Empresa Distribuidora

Risk-Adjusted Performance

Very Weak

Over the last 90 days Empresa Distribuidora y has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

DAIMLERCHRYSLER NORTH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DAIMLERCHRYSLER NORTH AMER are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, DAIMLERCHRYSLER may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Empresa Distribuidora and DAIMLERCHRYSLER

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

The idea behind Empresa Distribuidora y and DAIMLERCHRYSLER NORTH AMER 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 CEOs Directory module to screen CEOs from public companies around the world.