Correlation Between Iberpapel Gestion and Miquel Y

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

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

Diversification Opportunities for Iberpapel Gestion and Miquel Y

-0.05

Correlation Coefficient

Iberpapel Gestion  Miquel Y

Good diversification

The 3 months correlation between Iberpapel and Miquel is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Iberpapel Gestion SA 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 Iberpapel Gestion 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 Iberpapel Gestion SA 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 Iberpapel Gestion i.e., Iberpapel Gestion and Miquel Y go up and down completely randomly.

Pair Corralation between Iberpapel Gestion and Miquel Y

Assuming the 90 days trading horizon Iberpapel Gestion is expected to generate 1.08 times less return on investment than Miquel Y. But when comparing it to its historical volatility, Iberpapel Gestion SA is 1.54 times less risky than Miquel Y. It trades about 0.04 of its potential returns per unit of risk. Miquel y Costas is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,241  in Miquel y Costas on October 20, 2024 and sell it today you would earn a total of  24.00  from holding Miquel y Costas or generate 1.93% return on investment over 90 days.

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

Iberpapel Gestion SA  vs.  Miquel y Costas

Iberpapel Gestion

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Iberpapel Gestion SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Iberpapel Gestion 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 Iberpapel Gestion and Miquel Y

The main advantage of trading using opposite Iberpapel Gestion and Miquel Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iberpapel Gestion 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 Iberpapel Gestion SA 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.