Correlation Between IRSA Inversiones and Five Point

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

By analyzing existing cross correlation between IRSA Inversiones Y and Five Point Holdings, you can compare the effects of market volatilities on IRSA Inversiones and Five Point 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 IRSA Inversiones with a short position of Five Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRSA Inversiones and Five Point.

Diversification Opportunities for IRSA Inversiones and Five Point

-0.2

Correlation Coefficient

IRSA Inversiones  Five Point

Good diversification

The 3 months correlation between IRSA and Five is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding IRSA Inversiones Y and Five Point Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Point Holdings and IRSA Inversiones 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 IRSA Inversiones Y are associated (or correlated) with Five Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Point Holdings has no effect on the direction of IRSA Inversiones i.e., IRSA Inversiones and Five Point go up and down completely randomly.

Pair Corralation between IRSA Inversiones and Five Point

Considering the 90-day investment horizon IRSA Inversiones Y is expected to generate 2.14 times more return on investment than Five Point. However, IRSA Inversiones is 2.14 times more volatile than Five Point Holdings. It trades about 0.06 of its potential returns per unit of risk. Five Point Holdings is currently generating about -0.2 per unit of risk. If you would invest  915.00  in IRSA Inversiones Y on January 26, 2024 and sell it today you would earn a total of  28.00  from holding IRSA Inversiones Y or generate 3.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

IRSA Inversiones Y  vs.  Five Point Holdings

IRSA Inversiones Y

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in IRSA Inversiones Y are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, IRSA Inversiones may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Five Point Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Five Point Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with IRSA Inversiones and Five Point

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

The idea behind IRSA Inversiones Y and Five Point Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.