Correlation Between Cresud SACIF and Vitania
Can any of the company-specific risk be diversified away by investing in both Cresud SACIF and Vitania 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 Cresud SACIF and Vitania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cresud SACIF y and Vitania, you can compare the effects of market volatilities on Cresud SACIF and Vitania 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 Cresud SACIF with a short position of Vitania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SACIF and Vitania.
Diversification Opportunities for Cresud SACIF and Vitania
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cresud and Vitania is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Vitania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitania and Cresud SACIF 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 Cresud SACIF y are associated (or correlated) with Vitania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitania has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Vitania go up and down completely randomly.
Pair Corralation between Cresud SACIF and Vitania
Assuming the 90 days horizon Cresud SACIF y is expected to generate 1.18 times more return on investment than Vitania. However, Cresud SACIF is 1.18 times more volatile than Vitania. It trades about 0.08 of its potential returns per unit of risk. Vitania is currently generating about 0.01 per unit of risk. If you would invest 544.00 in Cresud SACIF y on January 26, 2024 and sell it today you would earn a total of 370.00 from holding Cresud SACIF y or generate 68.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 80.65% |
Values | Daily Returns |
Cresud SACIF y vs. Vitania
Performance |
Timeline |
Cresud SACIF y |
Vitania |
Cresud SACIF and Vitania Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cresud SACIF and Vitania
The main advantage of trading using opposite Cresud SACIF and Vitania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SACIF position performs unexpectedly, Vitania 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 Vitania will offset losses from the drop in Vitania's long position.Cresud SACIF vs. Steel Partners Holdings | Cresud SACIF vs. Compass Diversified | Cresud SACIF vs. Brookfield Business Partners | Cresud SACIF vs. Matthews International |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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