Correlation Between Mapfre and Pescanova

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

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

Diversification Opportunities for Mapfre and Pescanova

0.0

Correlation Coefficient

Mapfre  Pescanova

Pay attention - limited upside

The 3 months correlation between Mapfre and Pescanova is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Pescanova SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pescanova SA and Mapfre 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 Mapfre are associated (or correlated) with Pescanova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pescanova SA has no effect on the direction of Mapfre i.e., Mapfre and Pescanova go up and down completely randomly.

Pair Corralation between Mapfre and Pescanova

If you would invest  0.00  in Pescanova SA on February 13, 2024 and sell it today you would earn a total of  0.00  from holding Pescanova SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mapfre  vs.  Pescanova SA

Mapfre

Risk-Adjusted Performance

0 of 100

Good

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

Pescanova SA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pescanova SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Pescanova exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mapfre and Pescanova

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

The idea behind Mapfre and Pescanova 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.