Correlation Between Vivenio Residencial and Prosegur Cash

Can any of the company-specific risk be diversified away by investing in both Vivenio Residencial and Prosegur Cash 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 Vivenio Residencial and Prosegur Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Vivenio Residencial and Prosegur Cash

-0.57

Correlation Coefficient

Vivenio Residencial  Prosegur Cash

Excellent diversification

The 3 months correlation between Vivenio and Prosegur is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vivenio Residencial SOCIMI and Prosegur Cash SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosegur Cash SA and Vivenio Residencial 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 Vivenio Residencial SOCIMI are associated (or correlated) with Prosegur Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosegur Cash SA has no effect on the direction of Vivenio Residencial i.e., Vivenio Residencial and Prosegur Cash go up and down completely randomly.

Pair Corralation between Vivenio Residencial and Prosegur Cash

Assuming the 90 days trading horizon Vivenio Residencial SOCIMI is expected to generate 0.06 times more return on investment than Prosegur Cash. However, Vivenio Residencial SOCIMI is 16.38 times less risky than Prosegur Cash. It trades about 0.12 of its potential returns per unit of risk. Prosegur Cash SA is currently generating about 0.01 per unit of risk. If you would invest  135.00  in Vivenio Residencial SOCIMI on September 1, 2024 and sell it today you would earn a total of  1.00  from holding Vivenio Residencial SOCIMI or generate 0.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

Vivenio Residencial SOCIMI  vs.  Prosegur Cash SA

Vivenio Residencial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vivenio Residencial SOCIMI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Vivenio Residencial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Prosegur Cash SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vivenio Residencial and Prosegur Cash

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

The idea behind Vivenio Residencial SOCIMI and Prosegur Cash 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.