Correlation Between Fathom Holdings and IRSA Inversiones

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

By analyzing existing cross correlation between Fathom Holdings and IRSA Inversiones Y, you can compare the effects of market volatilities on Fathom Holdings and IRSA Inversiones 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 Fathom Holdings with a short position of IRSA Inversiones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fathom Holdings and IRSA Inversiones.

Diversification Opportunities for Fathom Holdings and IRSA Inversiones

-0.8

Correlation Coefficient

Fathom Holdings  IRSA Inversiones

Pay attention - limited upside

The 3 months correlation between Fathom and IRSA is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fathom Holdings and IRSA Inversiones Y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRSA Inversiones Y and Fathom Holdings 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 Fathom Holdings are associated (or correlated) with IRSA Inversiones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRSA Inversiones Y has no effect on the direction of Fathom Holdings i.e., Fathom Holdings and IRSA Inversiones go up and down completely randomly.

Pair Corralation between Fathom Holdings and IRSA Inversiones

Given the investment horizon of 90 days Fathom Holdings is expected to under-perform the IRSA Inversiones. In addition to that, Fathom Holdings is 1.67 times more volatile than IRSA Inversiones Y. It trades about -0.05 of its total potential returns per unit of risk. IRSA Inversiones Y is currently generating about 0.1 per unit of volatility. If you would invest  617.00  in IRSA Inversiones Y on September 12, 2024 and sell it today you would earn a total of  1,034  from holding IRSA Inversiones Y or generate 167.59% return on investment over 90 days.

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

Fathom Holdings  vs.  IRSA Inversiones Y

Fathom Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

IRSA Inversiones Y

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IRSA Inversiones Y are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, IRSA Inversiones unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fathom Holdings and IRSA Inversiones

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

The idea behind Fathom Holdings and IRSA Inversiones Y 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.