Correlation Between Elecnor SA and Adriano Care

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

By analyzing existing cross correlation between Elecnor SA and Adriano Care SOCIMI, you can compare the effects of market volatilities on Elecnor SA and Adriano Care 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 Elecnor SA with a short position of Adriano Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elecnor SA and Adriano Care.

Diversification Opportunities for Elecnor SA and Adriano Care

0.15

Correlation Coefficient

Elecnor SA  Adriano Care

Average diversification

The 3 months correlation between Elecnor and Adriano is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Elecnor SA and Adriano Care SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriano Care SOCIMI and Elecnor SA 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 Elecnor SA are associated (or correlated) with Adriano Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriano Care SOCIMI has no effect on the direction of Elecnor SA i.e., Elecnor SA and Adriano Care go up and down completely randomly.

Pair Corralation between Elecnor SA and Adriano Care

Assuming the 90 days trading horizon Elecnor SA is expected to generate 18.57 times more return on investment than Adriano Care. However, Elecnor SA is 18.57 times more volatile than Adriano Care SOCIMI. It trades about 0.05 of its potential returns per unit of risk. Adriano Care SOCIMI is currently generating about 0.13 per unit of risk. If you would invest  1,602  in Elecnor SA on December 1, 2024 and sell it today you would earn a total of  94.00  from holding Elecnor SA or generate 5.87% return on investment over 90 days.

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

Elecnor SA  vs.  Adriano Care SOCIMI

Elecnor SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elecnor SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Elecnor SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Adriano Care SOCIMI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adriano Care SOCIMI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Adriano Care is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Elecnor SA and Adriano Care

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

The idea behind Elecnor SA and Adriano Care SOCIMI 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.