Correlation Between Trajano Iberia and Global Dominion

Can any of the company-specific risk be diversified away by investing in both Trajano Iberia and Global Dominion 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 Trajano Iberia and Global Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trajano Iberia Socimi and Global Dominion Access, you can compare the effects of market volatilities on Trajano Iberia and Global Dominion 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 Trajano Iberia with a short position of Global Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trajano Iberia and Global Dominion.

Diversification Opportunities for Trajano Iberia and Global Dominion

0.25

Correlation Coefficient

Trajano Iberia  Global Dominion

Modest diversification

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

Pair Corralation between Trajano Iberia and Global Dominion

Assuming the 90 days trading horizon Trajano Iberia Socimi is expected to generate 11.75 times more return on investment than Global Dominion. However, Trajano Iberia is 11.75 times more volatile than Global Dominion Access. It trades about 0.08 of its potential returns per unit of risk. Global Dominion Access is currently generating about 0.02 per unit of risk. If you would invest  444.00  in Trajano Iberia Socimi on December 30, 2024 and sell it today you would lose (116.00) from holding Trajano Iberia Socimi or give up 26.13% of portfolio value over 90 days.

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

Trajano Iberia Socimi  vs.  Global Dominion Access

Trajano Iberia Socimi

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trajano Iberia Socimi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Trajano Iberia exhibited solid returns over the last few months and may actually be approaching a breakup point.

Global Dominion Access

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Dominion Access are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Global Dominion is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Trajano Iberia and Global Dominion

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

The idea behind Trajano Iberia Socimi and Global Dominion Access 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.