Correlation Between IRSA Inversiones and Gaucho Group

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Can any of the company-specific risk be diversified away by investing in both IRSA Inversiones and Gaucho Group 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 Gaucho Group 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 Gaucho Group Holdings, you can compare the effects of market volatilities on IRSA Inversiones and Gaucho Group 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 Gaucho Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRSA Inversiones and Gaucho Group.

Diversification Opportunities for IRSA Inversiones and Gaucho Group

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between IRSA and Gaucho is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding IRSA Inversiones Y and Gaucho Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaucho Group Holdings 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 Gaucho Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaucho Group Holdings has no effect on the direction of IRSA Inversiones i.e., IRSA Inversiones and Gaucho Group go up and down completely randomly.

Pair Corralation between IRSA Inversiones and Gaucho Group

Considering the 90-day investment horizon IRSA Inversiones Y is expected to generate 0.35 times more return on investment than Gaucho Group. However, IRSA Inversiones Y is 2.88 times less risky than Gaucho Group. It trades about 0.21 of its potential returns per unit of risk. Gaucho Group Holdings is currently generating about -0.15 per unit of risk. If you would invest  761.00  in IRSA Inversiones Y on September 29, 2024 and sell it today you would earn a total of  783.00  from holding IRSA Inversiones Y or generate 102.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy82.54%
ValuesDaily Returns

IRSA Inversiones Y  vs.  Gaucho Group Holdings

 Performance 
       Timeline  
IRSA Inversiones Y 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in IRSA Inversiones Y are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, IRSA Inversiones unveiled solid returns over the last few months and may actually be approaching a breakup point.
Gaucho Group Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Gaucho Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic 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.

IRSA Inversiones and Gaucho Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IRSA Inversiones and Gaucho Group

The main advantage of trading using opposite IRSA Inversiones and Gaucho Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRSA Inversiones position performs unexpectedly, Gaucho Group 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 Gaucho Group will offset losses from the drop in Gaucho Group's long position.
The idea behind IRSA Inversiones Y and Gaucho Group Holdings 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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