Correlation Between Constellation Brands and Elecnor,

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

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

Diversification Opportunities for Constellation Brands and Elecnor,

-0.68

Correlation Coefficient

Constellation Brands  Elecnor,

Excellent diversification

The 3 months correlation between Constellation and Elecnor, is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and Elecnor, SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elecnor, SA and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with Elecnor,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elecnor, SA has no effect on the direction of Constellation Brands i.e., Constellation Brands and Elecnor, go up and down completely randomly.

Pair Corralation between Constellation Brands and Elecnor,

Considering the 90-day investment horizon Constellation Brands Class is expected to under-perform the Elecnor,. But the stock apears to be less risky and, when comparing its historical volatility, Constellation Brands Class is 3.95 times less risky than Elecnor,. The stock trades about -0.04 of its potential returns per unit of risk. The Elecnor, SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  719.00  in Elecnor, SA on October 9, 2024 and sell it today you would earn a total of  831.00  from holding Elecnor, SA or generate 115.58% return on investment over 90 days.

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

Constellation Brands Class  vs.  Elecnor, SA

Constellation Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Constellation Brands Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Elecnor, SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elecnor, SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Elecnor, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Constellation Brands and Elecnor,

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

The idea behind Constellation Brands Class and Elecnor, 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.