Correlation Between Miquel Y and Fluidra

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

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

Diversification Opportunities for Miquel Y and Fluidra

-0.49

Correlation Coefficient

Miquel Y  Fluidra

Very good diversification

The 3 months correlation between Miquel and Fluidra is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Miquel y Costas and Fluidra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluidra and Miquel Y 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 Miquel y Costas are associated (or correlated) with Fluidra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluidra has no effect on the direction of Miquel Y i.e., Miquel Y and Fluidra go up and down completely randomly.

Pair Corralation between Miquel Y and Fluidra

Assuming the 90 days trading horizon Miquel y Costas is expected to generate 0.71 times more return on investment than Fluidra. However, Miquel y Costas is 1.4 times less risky than Fluidra. It trades about 0.06 of its potential returns per unit of risk. Fluidra is currently generating about -0.03 per unit of risk. If you would invest  1,265  in Miquel y Costas on December 27, 2024 and sell it today you would earn a total of  55.00  from holding Miquel y Costas or generate 4.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Miquel y Costas  vs.  Fluidra

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.

Fluidra

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Miquel Y and Fluidra

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

The idea behind Miquel y Costas and Fluidra 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.