Correlation Between Cia De and Mercal Inmuebles

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

By analyzing existing cross correlation between Cia de Distribucion and Mercal Inmuebles Socimi, you can compare the effects of market volatilities on Cia De and Mercal Inmuebles 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 Cia De with a short position of Mercal Inmuebles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cia De and Mercal Inmuebles.

Diversification Opportunities for Cia De and Mercal Inmuebles

0.0

Correlation Coefficient

Cia De  Mercal Inmuebles

Pay attention - limited upside

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

Pair Corralation between Cia De and Mercal Inmuebles

If you would invest  2,801  in Cia de Distribucion on December 28, 2024 and sell it today you would earn a total of  117.00  from holding Cia de Distribucion or generate 4.18% return on investment over 90 days.

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

Cia de Distribucion  vs.  Mercal Inmuebles Socimi

Cia de Distribucion

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cia de Distribucion are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Cia De is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Mercal Inmuebles Socimi

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Cia De and Mercal Inmuebles

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

The idea behind Cia de Distribucion and Mercal Inmuebles 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.