Correlation Between Garovaglio and Capex SA

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

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

Diversification Opportunities for Garovaglio and Capex SA

0.73

Correlation Coefficient

Garovaglio  Capex SA

Poor diversification

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

Pair Corralation between Garovaglio and Capex SA

Assuming the 90 days trading horizon Garovaglio is expected to generate 1.17 times less return on investment than Capex SA. In addition to that, Garovaglio is 1.28 times more volatile than Capex SA. It trades about 0.14 of its total potential returns per unit of risk. Capex SA is currently generating about 0.21 per unit of volatility. 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

Garovaglio y Zorraquin  vs.  Capex SA

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.

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.

Pair Trading with Garovaglio and Capex SA

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

The idea behind Garovaglio y Zorraquin and Capex SA 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.