Correlation Between Elaia Investment and Castellana Properties

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

By analyzing existing cross correlation between Elaia Investment Spain and Castellana Properties Socimi, you can compare the effects of market volatilities on Elaia Investment and Castellana Properties 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 Elaia Investment with a short position of Castellana Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elaia Investment and Castellana Properties.

Diversification Opportunities for Elaia Investment and Castellana Properties

-0.25

Correlation Coefficient

Elaia Investment  Castellana Properties

Very good diversification

The 3 months correlation between Elaia and Castellana is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Elaia Investment Spain and Castellana Properties Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellana Properties and Elaia 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 Elaia Investment Spain are associated (or correlated) with Castellana Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellana Properties has no effect on the direction of Elaia Investment i.e., Elaia Investment and Castellana Properties go up and down completely randomly.

Pair Corralation between Elaia Investment and Castellana Properties

Assuming the 90 days trading horizon Elaia Investment Spain is expected to under-perform the Castellana Properties. In addition to that, Elaia Investment is 7.82 times more volatile than Castellana Properties Socimi. It trades about -0.13 of its total potential returns per unit of risk. Castellana Properties Socimi is currently generating about 0.26 per unit of volatility. If you would invest  655.00  in Castellana Properties Socimi on September 13, 2024 and sell it today you would earn a total of  40.00  from holding Castellana Properties Socimi or generate 6.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Elaia Investment Spain  vs.  Castellana Properties Socimi

Elaia Investment Spain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elaia Investment Spain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Castellana Properties

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Castellana Properties Socimi are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Castellana Properties is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Elaia Investment and Castellana Properties

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

The idea behind Elaia Investment Spain and Castellana Properties Socimi 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.