Correlation Between Grifols SA and Fluidra

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

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

Diversification Opportunities for Grifols SA and Fluidra

-0.62

Correlation Coefficient

Grifols SA  Fluidra

Excellent diversification

The 3 months correlation between Grifols and Fluidra is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grifols SA and Fluidra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluidra and Grifols 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 Grifols SA are associated (or correlated) with Fluidra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluidra has no effect on the direction of Grifols SA i.e., Grifols SA and Fluidra go up and down completely randomly.

Pair Corralation between Grifols SA and Fluidra

Assuming the 90 days trading horizon Grifols SA is expected to under-perform the Fluidra. In addition to that, Grifols SA is 1.71 times more volatile than Fluidra. It trades about -0.03 of its total potential returns per unit of risk. Fluidra is currently generating about -0.03 per unit of volatility. If you would invest  2,352  in Fluidra on December 30, 2024 and sell it today you would lose (88.00) from holding Fluidra or give up 3.74% of portfolio value over 90 days.

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

Grifols SA  vs.  Fluidra

Grifols SA

Risk-Adjusted Performance

Very Weak

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

Fluidra

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Grifols SA and Fluidra

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

The idea behind Grifols SA and Fluidra 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.