Correlation Between Grupo Catalana and Miquel Y

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

By analyzing existing cross correlation between Grupo Catalana Occidente and Miquel y Costas, you can compare the effects of market volatilities on Grupo Catalana and Miquel Y 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 Grupo Catalana with a short position of Miquel Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Catalana and Miquel Y.

Diversification Opportunities for Grupo Catalana and Miquel Y

-0.51

Correlation Coefficient

Grupo Catalana  Miquel Y

Excellent diversification

The 3 months correlation between Grupo and Miquel is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Catalana Occidente and Miquel y Costas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miquel y Costas and Grupo Catalana 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 Grupo Catalana Occidente are associated (or correlated) with Miquel Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miquel y Costas has no effect on the direction of Grupo Catalana i.e., Grupo Catalana and Miquel Y go up and down completely randomly.

Pair Corralation between Grupo Catalana and Miquel Y

Assuming the 90 days trading horizon Grupo Catalana Occidente is expected to under-perform the Miquel Y. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Catalana Occidente is 1.86 times less risky than Miquel Y. The stock trades about -0.07 of its potential returns per unit of risk. The Miquel y Costas is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,201  in Miquel y Costas on September 13, 2024 and sell it today you would earn a total of  34.00  from holding Miquel y Costas or generate 2.83% return on investment over 90 days.

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

Grupo Catalana Occidente  vs.  Miquel y Costas

Grupo Catalana Occidente

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Catalana Occidente has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Grupo Catalana is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Miquel y Costas

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Miquel y Costas are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Miquel Y is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Grupo Catalana and Miquel Y

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

The idea behind Grupo Catalana Occidente and Miquel y Costas 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.