Correlation Between Marfin Investment and Prodea Real

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

By analyzing existing cross correlation between Marfin Investment Group and Prodea Real Estate, you can compare the effects of market volatilities on Marfin Investment and Prodea Real 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 Marfin Investment with a short position of Prodea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfin Investment and Prodea Real.

Diversification Opportunities for Marfin Investment and Prodea Real

0.6

Correlation Coefficient

Marfin Investment  Prodea Real

Poor diversification

The 3 months correlation between Marfin and Prodea is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Marfin Investment Group and Prodea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodea Real Estate and Marfin Investment 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 Marfin Investment Group are associated (or correlated) with Prodea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodea Real Estate has no effect on the direction of Marfin Investment i.e., Marfin Investment and Prodea Real go up and down completely randomly.

Pair Corralation between Marfin Investment and Prodea Real

Assuming the 90 days trading horizon Marfin Investment Group is expected to under-perform the Prodea Real. But the stock apears to be less risky and, when comparing its historical volatility, Marfin Investment Group is 1.76 times less risky than Prodea Real. The stock trades about -0.12 of its potential returns per unit of risk. The Prodea Real Estate is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  650.00  in Prodea Real Estate on September 5, 2024 and sell it today you would lose (30.00) from holding Prodea Real Estate or give up 4.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Marfin Investment Group  vs.  Prodea Real Estate

Marfin Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marfin Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Prodea Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prodea Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Prodea Real is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marfin Investment and Prodea Real

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

The idea behind Marfin Investment Group and Prodea Real Estate 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.