Correlation Between Meridia Real and Adriano Care

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

By analyzing existing cross correlation between Meridia Real Estate and Adriano Care SOCIMI, you can compare the effects of market volatilities on Meridia Real and Adriano Care 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 Meridia Real with a short position of Adriano Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridia Real and Adriano Care.

Diversification Opportunities for Meridia Real and Adriano Care

-0.45

Correlation Coefficient

Meridia Real  Adriano Care

Very good diversification

The 3 months correlation between Meridia and Adriano is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Meridia Real Estate and Adriano Care SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriano Care SOCIMI and Meridia Real 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 Meridia Real Estate are associated (or correlated) with Adriano Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriano Care SOCIMI has no effect on the direction of Meridia Real i.e., Meridia Real and Adriano Care go up and down completely randomly.

Pair Corralation between Meridia Real and Adriano Care

Assuming the 90 days trading horizon Meridia Real Estate is expected to generate 1.59 times more return on investment than Adriano Care. However, Meridia Real is 1.59 times more volatile than Adriano Care SOCIMI. It trades about 0.14 of its potential returns per unit of risk. Adriano Care SOCIMI is currently generating about -0.15 per unit of risk. If you would invest  79.00  in Meridia Real Estate on September 12, 2024 and sell it today you would earn a total of  8.00  from holding Meridia Real Estate or generate 10.13% return on investment over 90 days.

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

Meridia Real Estate  vs.  Adriano Care SOCIMI

Meridia Real Estate

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Meridia Real Estate are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Meridia Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Adriano Care SOCIMI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adriano Care SOCIMI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Meridia Real and Adriano Care

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

The idea behind Meridia Real Estate and Adriano Care 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.