Correlation Between Techo Hogar and Labiana Health

Can any of the company-specific risk be diversified away by investing in both Techo Hogar and Labiana Health 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 Labiana Health 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 Labiana Health SA, you can compare the effects of market volatilities on Techo Hogar and Labiana Health 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 Labiana Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techo Hogar and Labiana Health.

Diversification Opportunities for Techo Hogar and Labiana Health

0.11

Correlation Coefficient

Techo Hogar  Labiana Health

Average diversification

The 3 months correlation between Techo and Labiana is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Techo Hogar SOCIMI, and Labiana Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labiana Health 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 Labiana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labiana Health SA has no effect on the direction of Techo Hogar i.e., Techo Hogar and Labiana Health go up and down completely randomly.

Pair Corralation between Techo Hogar and Labiana Health

Assuming the 90 days trading horizon Techo Hogar SOCIMI, is expected to generate 0.09 times more return on investment than Labiana Health. However, Techo Hogar SOCIMI, is 11.65 times less risky than Labiana Health. It trades about 0.21 of its potential returns per unit of risk. Labiana Health SA is currently generating about -0.02 per unit of risk. If you would invest  103.00  in Techo Hogar SOCIMI, on December 30, 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	Insignificant
Accuracy	69.23%
Values	Daily Returns

Techo Hogar SOCIMI,  vs.  Labiana Health 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 16 (%) 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.

Labiana Health SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Techo Hogar and Labiana Health

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

The idea behind Techo Hogar SOCIMI, and Labiana Health 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.

Check out your portfolio center.

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.