Correlation Between Mota Engil and Cofina SGPS
Can any of the company-specific risk be diversified away by investing in both Mota Engil and Cofina SGPS 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 Mota Engil and Cofina SGPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mota Engil SGPS SA and Cofina SGPS, you can compare the effects of market volatilities on Mota Engil and Cofina SGPS 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 Mota Engil with a short position of Cofina SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mota Engil and Cofina SGPS.
Diversification Opportunities for Mota Engil and Cofina SGPS
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mota and Cofina is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mota Engil SGPS SA and Cofina SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cofina SGPS and Mota Engil 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 Mota Engil SGPS SA are associated (or correlated) with Cofina SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cofina SGPS has no effect on the direction of Mota Engil i.e., Mota Engil and Cofina SGPS go up and down completely randomly.
Pair Corralation between Mota Engil and Cofina SGPS
Assuming the 90 days trading horizon Mota Engil SGPS SA is expected to generate 1.06 times more return on investment than Cofina SGPS. However, Mota Engil is 1.06 times more volatile than Cofina SGPS. It trades about 0.14 of its potential returns per unit of risk. Cofina SGPS is currently generating about -0.07 per unit of risk. If you would invest 284.00 in Mota Engil SGPS SA on December 5, 2024 and sell it today you would earn a total of 19.00 from holding Mota Engil SGPS SA or generate 6.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Mota Engil SGPS SA vs. Cofina SGPS
Performance |
Timeline |
Mota Engil SGPS |
Cofina SGPS |
Mota Engil and Cofina SGPS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mota Engil and Cofina SGPS
The main advantage of trading using opposite Mota Engil and Cofina SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mota Engil position performs unexpectedly, Cofina SGPS 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 Cofina SGPS will offset losses from the drop in Cofina SGPS's long position.Mota Engil vs. Sonae SGPS SA | Mota Engil vs. Altri SGPS SA | Mota Engil vs. Banco Comercial Portugues | Mota Engil vs. Semapa |
Cofina SGPS vs. Mota Engil SGPS SA | Cofina SGPS vs. Altri SGPS SA | Cofina SGPS vs. Sonae SGPS SA | Cofina SGPS vs. Impresa Sociedade |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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