Correlation Between Secuoya Grupo and Construcciones

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

By analyzing existing cross correlation between Secuoya Grupo de and Construcciones y Auxiliar, you can compare the effects of market volatilities on Secuoya Grupo and Construcciones 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 Secuoya Grupo with a short position of Construcciones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secuoya Grupo and Construcciones.

Diversification Opportunities for Secuoya Grupo and Construcciones

0.64

Correlation Coefficient

Secuoya Grupo  Construcciones

Poor diversification

The 3 months correlation between Secuoya and Construcciones is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Secuoya Grupo de and Construcciones y Auxiliar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construcciones y Auxiliar and Secuoya Grupo 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 Secuoya Grupo de are associated (or correlated) with Construcciones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construcciones y Auxiliar has no effect on the direction of Secuoya Grupo i.e., Secuoya Grupo and Construcciones go up and down completely randomly.

Pair Corralation between Secuoya Grupo and Construcciones

Assuming the 90 days trading horizon Secuoya Grupo de is expected to generate 0.94 times more return on investment than Construcciones. However, Secuoya Grupo de is 1.06 times less risky than Construcciones. It trades about 0.41 of its potential returns per unit of risk. Construcciones y Auxiliar is currently generating about 0.2 per unit of risk. If you would invest  1,750  in Secuoya Grupo de on December 25, 2024 and sell it today you would earn a total of  590.00  from holding Secuoya Grupo de or generate 33.71% return on investment over 90 days.

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

Secuoya Grupo de  vs.  Construcciones y Auxiliar

Secuoya Grupo de

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Secuoya Grupo de are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Secuoya Grupo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Construcciones y Auxiliar

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Construcciones y Auxiliar are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Construcciones exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Secuoya Grupo and Construcciones

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

The idea behind Secuoya Grupo de and Construcciones y Auxiliar 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.