Correlation Between INGERSOLL and Cresud SACIF

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

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

Diversification Opportunities for INGERSOLL and Cresud SACIF

-0.55

Correlation Coefficient

INGERSOLL  Cresud SACIF

Excellent diversification

The 3 months correlation between INGERSOLL and Cresud is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding INGERSOLL RAND LUXEMBOURG FINA 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 INGERSOLL 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 INGERSOLL RAND LUXEMBOURG FINANCE 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 INGERSOLL i.e., INGERSOLL and Cresud SACIF go up and down completely randomly.

Pair Corralation between INGERSOLL and Cresud SACIF

Assuming the 90 days trading horizon INGERSOLL RAND LUXEMBOURG FINANCE is expected to under-perform the Cresud SACIF. But the bond apears to be less risky and, when comparing its historical volatility, INGERSOLL RAND LUXEMBOURG FINANCE is 7.33 times less risky than Cresud SACIF. The bond trades about -0.03 of its potential returns per unit of risk. The Cresud SACIF y is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  844.00  in Cresud SACIF y on October 7, 2024 and sell it today you would earn a total of  500.00  from holding Cresud SACIF y or generate 59.24% return on investment over 90 days.

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

INGERSOLL RAND LUXEMBOURG FINA  vs.  Cresud SACIF y

INGERSOLL RAND LUXEM

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cresud SACIF y

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 20 (%) 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 INGERSOLL and Cresud SACIF

The main advantage of trading using opposite INGERSOLL and Cresud SACIF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INGERSOLL 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 INGERSOLL RAND LUXEMBOURG FINANCE 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.