Correlation Between Neinor Homes and Arteche Lantegi

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

By analyzing existing cross correlation between Neinor Homes SLU and Arteche Lantegi Elkartea, you can compare the effects of market volatilities on Neinor Homes and Arteche Lantegi 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 Neinor Homes with a short position of Arteche Lantegi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and Arteche Lantegi.

Diversification Opportunities for Neinor Homes and Arteche Lantegi

-0.14

Correlation Coefficient

Neinor Homes  Arteche Lantegi

Good diversification

The 3 months correlation between Neinor and Arteche is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SLU and Arteche Lantegi Elkartea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arteche Lantegi Elkartea and Neinor Homes 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 Neinor Homes SLU are associated (or correlated) with Arteche Lantegi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arteche Lantegi Elkartea has no effect on the direction of Neinor Homes i.e., Neinor Homes and Arteche Lantegi go up and down completely randomly.

Pair Corralation between Neinor Homes and Arteche Lantegi

Assuming the 90 days trading horizon Neinor Homes SLU is expected to under-perform the Arteche Lantegi. But the stock apears to be less risky and, when comparing its historical volatility, Neinor Homes SLU is 1.42 times less risky than Arteche Lantegi. The stock trades about -0.06 of its potential returns per unit of risk. The Arteche Lantegi Elkartea is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  745.00  in Arteche Lantegi Elkartea on December 28, 2024 and sell it today you would earn a total of  45.00  from holding Arteche Lantegi Elkartea or generate 6.04% return on investment over 90 days.

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

Neinor Homes SLU  vs.  Arteche Lantegi Elkartea

Neinor Homes SLU

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neinor Homes SLU has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Arteche Lantegi Elkartea

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arteche Lantegi Elkartea are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Arteche Lantegi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Neinor Homes and Arteche Lantegi

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

The idea behind Neinor Homes SLU and Arteche Lantegi Elkartea 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.