Correlation Between Capex SA and Garovaglio

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

By analyzing existing cross correlation between Capex SA and Garovaglio y Zorraquin, you can compare the effects of market volatilities on Capex SA and Garovaglio 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 Capex SA with a short position of Garovaglio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and Garovaglio.

Diversification Opportunities for Capex SA and Garovaglio

0.73

Correlation Coefficient

Capex SA  Garovaglio

Poor diversification

The 3 months correlation between Capex and Garovaglio is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and Garovaglio y Zorraquin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garovaglio y Zorraquin and Capex SA 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 Capex SA are associated (or correlated) with Garovaglio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garovaglio y Zorraquin has no effect on the direction of Capex SA i.e., Capex SA and Garovaglio go up and down completely randomly.

Pair Corralation between Capex SA and Garovaglio

Assuming the 90 days trading horizon Capex SA is expected to generate 0.78 times more return on investment than Garovaglio. However, Capex SA is 1.28 times less risky than Garovaglio. It trades about 0.21 of its potential returns per unit of risk. Garovaglio y Zorraquin is currently generating about 0.14 per unit of risk. If you would invest  622,000  in Capex SA on September 5, 2024 and sell it today you would earn a total of  285,000  from holding Capex SA or generate 45.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Capex SA  vs.  Garovaglio y Zorraquin

Capex SA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Capex SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Capex SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Garovaglio y Zorraquin

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Garovaglio y Zorraquin are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Garovaglio sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capex SA and Garovaglio

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

The idea behind Capex SA and Garovaglio y Zorraquin 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.