Correlation Between Techo Hogar and Catenon SA

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

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

Diversification Opportunities for Techo Hogar and Catenon SA

0.38

Correlation Coefficient

Techo Hogar  Catenon SA

Weak diversification

The 3 months correlation between Techo and Catenon is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Techo Hogar SOCIMI, and Catenon SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catenon SA and Techo Hogar 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 Techo Hogar SOCIMI, are associated (or correlated) with Catenon SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catenon SA has no effect on the direction of Techo Hogar i.e., Techo Hogar and Catenon SA go up and down completely randomly.

Pair Corralation between Techo Hogar and Catenon SA

Assuming the 90 days trading horizon Techo Hogar SOCIMI, is expected to generate 0.06 times more return on investment than Catenon SA. However, Techo Hogar SOCIMI, is 17.5 times less risky than Catenon SA. It trades about 0.23 of its potential returns per unit of risk. Catenon SA is currently generating about -0.01 per unit of risk. If you would invest  103.00  in Techo Hogar SOCIMI, on December 22, 2024 and sell it today you would earn a total of  2.00  from holding Techo Hogar SOCIMI, or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	64.52%
Values	Daily Returns

Techo Hogar SOCIMI,  vs.  Catenon SA

Techo Hogar SOCIMI,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Techo Hogar SOCIMI, are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Techo Hogar is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Catenon SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Techo Hogar and Catenon SA

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

The idea behind Techo Hogar SOCIMI, and Catenon SA 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.