Correlation Between Mapfre and Miquel Y

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

By analyzing existing cross correlation between Mapfre and Miquel y Costas, you can compare the effects of market volatilities on Mapfre and Miquel Y 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 Mapfre with a short position of Miquel Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and Miquel Y.

Diversification Opportunities for Mapfre and Miquel Y

0.74

Correlation Coefficient

Mapfre  Miquel Y

Poor diversification

The 3 months correlation between Mapfre and Miquel is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Miquel y Costas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miquel y Costas and Mapfre 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 Mapfre are associated (or correlated) with Miquel Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miquel y Costas has no effect on the direction of Mapfre i.e., Mapfre and Miquel Y go up and down completely randomly.

Pair Corralation between Mapfre and Miquel Y

Assuming the 90 days trading horizon Mapfre is expected to generate 1.36 times more return on investment than Miquel Y. However, Mapfre is 1.36 times more volatile than Miquel y Costas. It trades about 0.2 of its potential returns per unit of risk. Miquel y Costas is currently generating about 0.07 per unit of risk. If you would invest  243.00  in Mapfre on December 21, 2024 and sell it today you would earn a total of  43.00  from holding Mapfre or generate 17.7% return on investment over 90 days.

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

Mapfre  vs.  Miquel y Costas

Mapfre

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mapfre are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Mapfre exhibited solid returns over the last few months and may actually be approaching a breakup point.

Miquel y Costas

Risk-Adjusted Performance

Modest

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

Pair Trading with Mapfre and Miquel Y

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

The idea behind Mapfre and Miquel y Costas 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.