Correlation Between Sociedad Matriz and Sociedad Punta

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

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

Diversification Opportunities for Sociedad Matriz and Sociedad Punta

-0.17

Correlation Coefficient

Sociedad Matriz  Sociedad Punta

Good diversification

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

Pair Corralation between Sociedad Matriz and Sociedad Punta

Assuming the 90 days trading horizon Sociedad Matriz SAAM is expected to generate 1.58 times more return on investment than Sociedad Punta. However, Sociedad Matriz is 1.58 times more volatile than Sociedad Punta del. It trades about -0.01 of its potential returns per unit of risk. Sociedad Punta del is currently generating about -0.09 per unit of risk. If you would invest  10,199  in Sociedad Matriz SAAM on September 12, 2024 and sell it today you would lose (128.00) from holding Sociedad Matriz SAAM or give up 1.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.36%
Values	Daily Returns

Sociedad Matriz SAAM  vs.  Sociedad Punta del

Sociedad Matriz SAAM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sociedad Matriz SAAM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sociedad Matriz is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Sociedad Punta del

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sociedad Matriz and Sociedad Punta

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

The idea behind Sociedad Matriz SAAM and Sociedad Punta del 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.