Correlation Between Plasticos Compuestos and Izertis Sa

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

By analyzing existing cross correlation between Plasticos Compuestos SA and Izertis Sa, you can compare the effects of market volatilities on Plasticos Compuestos and Izertis Sa 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 Plasticos Compuestos with a short position of Izertis Sa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plasticos Compuestos and Izertis Sa.

Diversification Opportunities for Plasticos Compuestos and Izertis Sa

0.02

Correlation Coefficient

Plasticos Compuestos  Izertis Sa

Significant diversification

The 3 months correlation between Plasticos and Izertis is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Plasticos Compuestos SA and Izertis Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Izertis Sa and Plasticos Compuestos 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 Plasticos Compuestos SA are associated (or correlated) with Izertis Sa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Izertis Sa has no effect on the direction of Plasticos Compuestos i.e., Plasticos Compuestos and Izertis Sa go up and down completely randomly.

Pair Corralation between Plasticos Compuestos and Izertis Sa

Assuming the 90 days trading horizon Plasticos Compuestos SA is expected to generate 7.35 times more return on investment than Izertis Sa. However, Plasticos Compuestos is 7.35 times more volatile than Izertis Sa. It trades about 0.0 of its potential returns per unit of risk. Izertis Sa is currently generating about -0.12 per unit of risk. If you would invest  107.00  in Plasticos Compuestos SA on September 12, 2024 and sell it today you would lose (6.00) from holding Plasticos Compuestos SA or give up 5.61% of portfolio value over 90 days.

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

Plasticos Compuestos SA  vs.  Izertis Sa

Plasticos Compuestos

Risk-Adjusted Performance

0 of 100

Very Weak

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

Izertis Sa

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Plasticos Compuestos and Izertis Sa

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

The idea behind Plasticos Compuestos SA and Izertis Sa 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.