Correlation Between Cresud SACIF and NN

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

Diversification Opportunities for Cresud SACIF and NN

-0.63

Correlation Coefficient

Cresud SACIF  NN

Excellent diversification

The 3 months correlation between Cresud and NN is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and NN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Inc 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 NN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Inc has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and NN go up and down completely randomly.

Pair Corralation between Cresud SACIF and NN

Assuming the 90 days horizon Cresud SACIF y is expected to generate 1.76 times more return on investment than NN. However, Cresud SACIF is 1.76 times more volatile than NN Inc. It trades about 0.04 of its potential returns per unit of risk. NN Inc is currently generating about 0.03 per unit of risk. If you would invest  50.00  in Cresud SACIF y on March 19, 2024 and sell it today you would earn a total of  1.00  from holding Cresud SACIF y or generate 2.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.07%
Values	Daily Returns

Cresud SACIF y  vs.  NN Inc

Cresud SACIF y

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cresud SACIF showed solid returns over the last few months and may actually be approaching a breakup point.

NN Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NN Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in July 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Cresud SACIF and NN

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

The idea behind Cresud SACIF y and NN Inc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.