Correlation Between 00108WAJ9 and Cresud SACIF

Can any of the company-specific risk be diversified away by investing in both 00108WAJ9 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 00108WAJ9 and Cresud SACIF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AEP Texas 415 and Cresud SACIF y, you can compare the effects of market volatilities on 00108WAJ9 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 00108WAJ9 with a short position of Cresud SACIF. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAJ9 and Cresud SACIF.

Diversification Opportunities for 00108WAJ9 and Cresud SACIF

-0.56

Correlation Coefficient

00108WAJ9  Cresud SACIF

Excellent diversification

The 3 months correlation between 00108WAJ9 and Cresud is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding AEP Texas 415 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 00108WAJ9 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 AEP Texas 415 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 00108WAJ9 i.e., 00108WAJ9 and Cresud SACIF go up and down completely randomly.

Pair Corralation between 00108WAJ9 and Cresud SACIF

Assuming the 90 days trading horizon AEP Texas 415 is expected to generate 1.35 times more return on investment than Cresud SACIF. However, 00108WAJ9 is 1.35 times more volatile than Cresud SACIF y. It trades about 0.14 of its potential returns per unit of risk. Cresud SACIF y is currently generating about -0.01 per unit of risk. If you would invest  7,892  in AEP Texas 415 on October 11, 2024 and sell it today you would earn a total of  564.00  from holding AEP Texas 415 or generate 7.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	66.67%
Values	Daily Returns

AEP Texas 415  vs.  Cresud SACIF y

AEP Texas 415

Risk-Adjusted Performance

4 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AEP Texas 415 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 00108WAJ9 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cresud SACIF y

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 16 (%) 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 00108WAJ9 and Cresud SACIF

The main advantage of trading using opposite 00108WAJ9 and Cresud SACIF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAJ9 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 AEP Texas 415 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.