Correlation Between Deoleo SA and Sacyr SA

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

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

Diversification Opportunities for Deoleo SA and Sacyr SA

0.15

Correlation Coefficient

Deoleo SA  Sacyr SA

Average diversification

The 3 months correlation between Deoleo and Sacyr is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Deoleo SA and Sacyr SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sacyr SA and Deoleo SA 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 Deoleo SA are associated (or correlated) with Sacyr SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sacyr SA has no effect on the direction of Deoleo SA i.e., Deoleo SA and Sacyr SA go up and down completely randomly.

Pair Corralation between Deoleo SA and Sacyr SA

Assuming the 90 days trading horizon Deoleo SA is expected to generate 4.23 times less return on investment than Sacyr SA. In addition to that, Deoleo SA is 1.93 times more volatile than Sacyr SA. It trades about 0.01 of its total potential returns per unit of risk. Sacyr SA is currently generating about 0.1 per unit of volatility. If you would invest  308.00  in Sacyr SA on December 30, 2024 and sell it today you would earn a total of  23.00  from holding Sacyr SA or generate 7.47% return on investment over 90 days.

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

Deoleo SA  vs.  Sacyr SA

Deoleo SA

Risk-Adjusted Performance

Very Weak

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

Sacyr SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sacyr SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Sacyr SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Deoleo SA and Sacyr SA

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

The idea behind Deoleo SA and Sacyr 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.