Correlation Between ACS Actividades and Vinci SA

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

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

Diversification Opportunities for ACS Actividades and Vinci SA

-0.58

Correlation Coefficient

ACS Actividades  Vinci SA

Excellent diversification

The 3 months correlation between ACS and Vinci is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades de and Vinci SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA ADR and ACS Actividades 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 ACS Actividades de are associated (or correlated) with Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA ADR has no effect on the direction of ACS Actividades i.e., ACS Actividades and Vinci SA go up and down completely randomly.

Pair Corralation between ACS Actividades and Vinci SA

Assuming the 90 days horizon ACS Actividades de is expected to generate 3.35 times more return on investment than Vinci SA. However, ACS Actividades is 3.35 times more volatile than Vinci SA ADR. It trades about 0.05 of its potential returns per unit of risk. Vinci SA ADR is currently generating about 0.02 per unit of risk. If you would invest  2,837  in ACS Actividades de on September 22, 2024 and sell it today you would earn a total of  1,888  from holding ACS Actividades de or generate 66.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	78.63%
Values	Daily Returns

ACS Actividades de  vs.  Vinci SA ADR

ACS Actividades de

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ACS Actividades de are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ACS Actividades is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Vinci SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinci SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ACS Actividades and Vinci SA

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

The idea behind ACS Actividades de and Vinci SA ADR 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.