Correlation Between Industria and Techo Hogar

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

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

Diversification Opportunities for Industria and Techo Hogar

0.1

Correlation Coefficient

Industria  Techo Hogar

Average diversification

The 3 months correlation between Industria and Techo is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and Techo Hogar SOCIMI, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techo Hogar SOCIMI, and Industria 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 Industria de Diseno are associated (or correlated) with Techo Hogar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techo Hogar SOCIMI, has no effect on the direction of Industria i.e., Industria and Techo Hogar go up and down completely randomly.

Pair Corralation between Industria and Techo Hogar

Assuming the 90 days trading horizon Industria de Diseno is expected to under-perform the Techo Hogar. In addition to that, Industria is 8.23 times more volatile than Techo Hogar SOCIMI,. It trades about -0.06 of its total potential returns per unit of risk. Techo Hogar SOCIMI, is currently generating about 0.21 per unit of volatility. If you would invest  103.00  in Techo Hogar SOCIMI, on December 30, 2024 and sell it today you would earn a total of  2.00  from holding Techo Hogar SOCIMI, or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	69.23%
Values	Daily Returns

Industria de Diseno  vs.  Techo Hogar SOCIMI,

Industria de Diseno

Risk-Adjusted Performance

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.

Techo Hogar SOCIMI,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Techo Hogar SOCIMI, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Techo Hogar is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Industria and Techo Hogar

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

The idea behind Industria de Diseno and Techo Hogar SOCIMI, 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.