Correlation Between Indexa Capital and Industria

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

By analyzing existing cross correlation between Indexa Capital Group, and Industria de Diseno, you can compare the effects of market volatilities on Indexa Capital and Industria 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 Indexa Capital with a short position of Industria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indexa Capital and Industria.

Diversification Opportunities for Indexa Capital and Industria

-0.3

Correlation Coefficient

Indexa Capital  Industria

Very good diversification

The 3 months correlation between Indexa and Industria is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Indexa Capital Group, and Industria de Diseno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industria de Diseno and Indexa Capital 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 Indexa Capital Group, are associated (or correlated) with Industria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industria de Diseno has no effect on the direction of Indexa Capital i.e., Indexa Capital and Industria go up and down completely randomly.

Pair Corralation between Indexa Capital and Industria

Assuming the 90 days trading horizon Indexa Capital Group, is expected to under-perform the Industria. In addition to that, Indexa Capital is 2.01 times more volatile than Industria de Diseno. It trades about -0.19 of its total potential returns per unit of risk. Industria de Diseno is currently generating about 0.01 per unit of volatility. If you would invest  5,013  in Industria de Diseno on September 16, 2024 and sell it today you would earn a total of  7.00  from holding Industria de Diseno or generate 0.14% return on investment over 90 days.

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

Indexa Capital Group,  vs.  Industria de Diseno

Indexa Capital Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indexa Capital Group, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary 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.

Industria de Diseno

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Indexa Capital and Industria

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

The idea behind Indexa Capital Group, and Industria de Diseno 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.