Correlation Between IRSA Inversiones and Re Max

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

By analyzing existing cross correlation between IRSA Inversiones Y and Re Max Holding, you can compare the effects of market volatilities on IRSA Inversiones and Re Max 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 IRSA Inversiones with a short position of Re Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRSA Inversiones and Re Max.

Diversification Opportunities for IRSA Inversiones and Re Max

0.37

Correlation Coefficient

IRSA Inversiones  Re Max

Weak diversification

The 3 months correlation between IRSA and RMAX is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding IRSA Inversiones Y and Re Max Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Re Max Holding and IRSA Inversiones 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 IRSA Inversiones Y are associated (or correlated) with Re Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Re Max Holding has no effect on the direction of IRSA Inversiones i.e., IRSA Inversiones and Re Max go up and down completely randomly.

Pair Corralation between IRSA Inversiones and Re Max

Considering the 90-day investment horizon IRSA Inversiones Y is expected to generate 0.69 times more return on investment than Re Max. However, IRSA Inversiones Y is 1.44 times less risky than Re Max. It trades about 0.32 of its potential returns per unit of risk. Re Max Holding is currently generating about 0.11 per unit of risk. If you would invest  1,024  in IRSA Inversiones Y on September 4, 2024 and sell it today you would earn a total of  677.00  from holding IRSA Inversiones Y or generate 66.11% return on investment over 90 days.

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

IRSA Inversiones Y  vs.  Re Max Holding

IRSA Inversiones Y

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IRSA Inversiones Y are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, IRSA Inversiones unveiled solid returns over the last few months and may actually be approaching a breakup point.

Re Max Holding

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Re Max Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Re Max showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IRSA Inversiones and Re Max

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

The idea behind IRSA Inversiones Y and Re Max Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.