Correlation Between Invertec Foods and Sociedad Matriz

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

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

Diversification Opportunities for Invertec Foods and Sociedad Matriz

0.0

Correlation Coefficient

Invertec Foods  Sociedad Matriz

Pay attention - limited upside

The 3 months correlation between Invertec and Sociedad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invertec Foods SA and Sociedad Matriz SAAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Matriz SAAM and Invertec Foods 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 Invertec Foods SA are associated (or correlated) with Sociedad Matriz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Matriz SAAM has no effect on the direction of Invertec Foods i.e., Invertec Foods and Sociedad Matriz go up and down completely randomly.

Pair Corralation between Invertec Foods and Sociedad Matriz

If you would invest  7,959  in Sociedad Matriz SAAM on October 21, 2024 and sell it today you would earn a total of  2,619  from holding Sociedad Matriz SAAM or generate 32.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Invertec Foods SA  vs.  Sociedad Matriz SAAM

Invertec Foods SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invertec Foods SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Invertec Foods is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Sociedad Matriz SAAM

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sociedad Matriz SAAM are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sociedad Matriz is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invertec Foods and Sociedad Matriz

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

The idea behind Invertec Foods SA and Sociedad Matriz SAAM 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.