Correlation Between Mapfre and Inhome Prime

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

By analyzing existing cross correlation between Mapfre and Inhome Prime Properties, you can compare the effects of market volatilities on Mapfre and Inhome Prime 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 Inhome Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and Inhome Prime.

Diversification Opportunities for Mapfre and Inhome Prime

0.17

Correlation Coefficient

Mapfre  Inhome Prime

Average diversification

The 3 months correlation between Mapfre and Inhome is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Inhome Prime Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhome Prime Properties 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 Inhome Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhome Prime Properties has no effect on the direction of Mapfre i.e., Mapfre and Inhome Prime go up and down completely randomly.

Pair Corralation between Mapfre and Inhome Prime

Assuming the 90 days trading horizon Mapfre is expected to generate 1.48 times more return on investment than Inhome Prime. However, Mapfre is 1.48 times more volatile than Inhome Prime Properties. It trades about 0.1 of its potential returns per unit of risk. Inhome Prime Properties is currently generating about 0.07 per unit of risk. If you would invest  182.00  in Mapfre on October 27, 2024 and sell it today you would earn a total of  76.00  from holding Mapfre or generate 41.76% return on investment over 90 days.

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

Mapfre  vs.  Inhome Prime Properties

Mapfre

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mapfre are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Mapfre is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Inhome Prime Properties

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inhome Prime Properties are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Inhome Prime exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mapfre and Inhome Prime

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

The idea behind Mapfre and Inhome Prime Properties 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 Commodity Directory module to find actively traded commodities issued by global exchanges.