Correlation Between ACS Actividades and Sprott Focus

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

Diversification Opportunities for ACS Actividades and Sprott Focus

0.31

Correlation Coefficient

ACS Actividades  Sprott Focus

Weak diversification

The 3 months correlation between ACS and Sprott is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades De and Sprott Focus Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Focus Trust 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 Sprott Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Focus Trust has no effect on the direction of ACS Actividades i.e., ACS Actividades and Sprott Focus go up and down completely randomly.

Pair Corralation between ACS Actividades and Sprott Focus

Assuming the 90 days horizon ACS Actividades De is expected to generate 2.72 times more return on investment than Sprott Focus. However, ACS Actividades is 2.72 times more volatile than Sprott Focus Trust. It trades about 0.24 of its potential returns per unit of risk. Sprott Focus Trust is currently generating about 0.07 per unit of risk. If you would invest  912.00  in ACS Actividades De on September 12, 2024 and sell it today you would earn a total of  89.00  from holding ACS Actividades De or generate 9.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

ACS Actividades De  vs.  Sprott Focus Trust

ACS Actividades De

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ACS Actividades De are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, ACS Actividades may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sprott Focus Trust

Risk-Adjusted Performance

13 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Focus Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Sprott Focus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ACS Actividades and Sprott Focus

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

The idea behind ACS Actividades De and Sprott Focus Trust 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.