Correlation Between All Iron and Castellana Properties

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

By analyzing existing cross correlation between All Iron Re and Castellana Properties Socimi, you can compare the effects of market volatilities on All Iron and Castellana Properties 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 All Iron with a short position of Castellana Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Iron and Castellana Properties.

Diversification Opportunities for All Iron and Castellana Properties

-0.25

Correlation Coefficient

All Iron  Castellana Properties

Very good diversification

The 3 months correlation between All and Castellana is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding All Iron Re and Castellana Properties Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellana Properties and All Iron 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 All Iron Re are associated (or correlated) with Castellana Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellana Properties has no effect on the direction of All Iron i.e., All Iron and Castellana Properties go up and down completely randomly.

Pair Corralation between All Iron and Castellana Properties

Assuming the 90 days trading horizon All Iron Re is expected to under-perform the Castellana Properties. But the stock apears to be less risky and, when comparing its historical volatility, All Iron Re is 2.56 times less risky than Castellana Properties. The stock trades about -0.02 of its potential returns per unit of risk. The Castellana Properties Socimi is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  695.00  in Castellana Properties Socimi on December 30, 2024 and sell it today you would lose (10.00) from holding Castellana Properties Socimi or give up 1.44% of portfolio value over 90 days.

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

All Iron Re  vs.  Castellana Properties Socimi

All Iron Re

Risk-Adjusted Performance

Very Weak

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

Castellana Properties

Risk-Adjusted Performance

Very Weak

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

Pair Trading with All Iron and Castellana Properties

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

The idea behind All Iron Re and Castellana Properties Socimi 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.