Correlation Between Multiexport Foods and Sociedad Agricola

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

By analyzing existing cross correlation between Multiexport Foods SA and Sociedad Agricola La, you can compare the effects of market volatilities on Multiexport Foods and Sociedad Agricola 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 Multiexport Foods with a short position of Sociedad Agricola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multiexport Foods and Sociedad Agricola.

Diversification Opportunities for Multiexport Foods and Sociedad Agricola

0.0

Correlation Coefficient

Multiexport Foods  Sociedad Agricola

Pay attention - limited upside

The 3 months correlation between Multiexport and Sociedad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Multiexport Foods SA and Sociedad Agricola La in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Agricola and Multiexport Foods 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 Multiexport Foods SA are associated (or correlated) with Sociedad Agricola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Agricola has no effect on the direction of Multiexport Foods i.e., Multiexport Foods and Sociedad Agricola go up and down completely randomly.

Pair Corralation between Multiexport Foods and Sociedad Agricola

If you would invest  18,641  in Multiexport Foods SA on September 2, 2024 and sell it today you would earn a total of  1,759  from holding Multiexport Foods SA or generate 9.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Multiexport Foods SA  vs.  Sociedad Agricola La

Multiexport Foods

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Multiexport Foods SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Multiexport Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

Sociedad Agricola

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sociedad Agricola La has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Sociedad Agricola is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Multiexport Foods and Sociedad Agricola

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

The idea behind Multiexport Foods SA and Sociedad Agricola La 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.