Correlation Between Steel Partners and Cresud SACIF

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

By analyzing existing cross correlation between Steel Partners Holdings and Cresud SACIF y, you can compare the effects of market volatilities on Steel Partners and Cresud SACIF 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 Steel Partners with a short position of Cresud SACIF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Partners and Cresud SACIF.

Diversification Opportunities for Steel Partners and Cresud SACIF

0.59

Correlation Coefficient

Steel Partners  Cresud SACIF

Very weak diversification

The 3 months correlation between Steel and Cresud is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Steel Partners Holdings and Cresud SACIF y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SACIF y and Steel Partners 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 Steel Partners Holdings are associated (or correlated) with Cresud SACIF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SACIF y has no effect on the direction of Steel Partners i.e., Steel Partners and Cresud SACIF go up and down completely randomly.

Pair Corralation between Steel Partners and Cresud SACIF

Given the investment horizon of 90 days Steel Partners is expected to generate 8.22 times less return on investment than Cresud SACIF. In addition to that, Steel Partners is 1.23 times more volatile than Cresud SACIF y. It trades about 0.02 of its total potential returns per unit of risk. Cresud SACIF y is currently generating about 0.2 per unit of volatility. If you would invest  847.00  in Cresud SACIF y on October 21, 2024 and sell it today you would earn a total of  362.00  from holding Cresud SACIF y or generate 42.74% return on investment over 90 days.

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

Steel Partners Holdings  vs.  Cresud SACIF y

Steel Partners Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Steel Partners Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Steel Partners is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Cresud SACIF y

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Cresud SACIF showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Steel Partners and Cresud SACIF

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

The idea behind Steel Partners Holdings and Cresud SACIF y 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.