Correlation Between Azaria Rental and Hispanotels Inversiones

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

By analyzing existing cross correlation between Azaria Rental SOCIMI and Hispanotels Inversiones SOCIMI, you can compare the effects of market volatilities on Azaria Rental and Hispanotels Inversiones 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 Azaria Rental with a short position of Hispanotels Inversiones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azaria Rental and Hispanotels Inversiones.

Diversification Opportunities for Azaria Rental and Hispanotels Inversiones

-0.83

Correlation Coefficient

Azaria Rental  Hispanotels Inversiones

Pay attention - limited upside

The 3 months correlation between Azaria and Hispanotels is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Azaria Rental SOCIMI and Hispanotels Inversiones SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hispanotels Inversiones and Azaria Rental 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 Azaria Rental SOCIMI are associated (or correlated) with Hispanotels Inversiones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hispanotels Inversiones has no effect on the direction of Azaria Rental i.e., Azaria Rental and Hispanotels Inversiones go up and down completely randomly.

Pair Corralation between Azaria Rental and Hispanotels Inversiones

Assuming the 90 days trading horizon Azaria Rental SOCIMI is expected to under-perform the Hispanotels Inversiones. But the stock apears to be less risky and, when comparing its historical volatility, Azaria Rental SOCIMI is 2.26 times less risky than Hispanotels Inversiones. The stock trades about -0.11 of its potential returns per unit of risk. The Hispanotels Inversiones SOCIMI is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  710.00  in Hispanotels Inversiones SOCIMI on December 30, 2024 and sell it today you would earn a total of  50.00  from holding Hispanotels Inversiones SOCIMI or generate 7.04% return on investment over 90 days.

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

Azaria Rental SOCIMI  vs.  Hispanotels Inversiones SOCIMI

Azaria Rental SOCIMI

Risk-Adjusted Performance

Very Weak

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

Hispanotels Inversiones

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hispanotels Inversiones SOCIMI are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Hispanotels Inversiones may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Azaria Rental and Hispanotels Inversiones

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

The idea behind Azaria Rental SOCIMI and Hispanotels Inversiones 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.