Correlation Between Fidere Patrimonio and Adolfo Dominguez

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

By analyzing existing cross correlation between Fidere Patrimonio SOCIMI and Adolfo Dominguez SA, you can compare the effects of market volatilities on Fidere Patrimonio and Adolfo Dominguez 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 Fidere Patrimonio with a short position of Adolfo Dominguez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidere Patrimonio and Adolfo Dominguez.

Diversification Opportunities for Fidere Patrimonio and Adolfo Dominguez

-0.32

Correlation Coefficient

Fidere Patrimonio  Adolfo Dominguez

Very good diversification

The 3 months correlation between Fidere and Adolfo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fidere Patrimonio SOCIMI and Adolfo Dominguez SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adolfo Dominguez and Fidere Patrimonio 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 Fidere Patrimonio SOCIMI are associated (or correlated) with Adolfo Dominguez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adolfo Dominguez has no effect on the direction of Fidere Patrimonio i.e., Fidere Patrimonio and Adolfo Dominguez go up and down completely randomly.

Pair Corralation between Fidere Patrimonio and Adolfo Dominguez

Assuming the 90 days trading horizon Fidere Patrimonio SOCIMI is expected to under-perform the Adolfo Dominguez. In addition to that, Fidere Patrimonio is 2.21 times more volatile than Adolfo Dominguez SA. It trades about -0.12 of its total potential returns per unit of risk. Adolfo Dominguez SA is currently generating about 0.06 per unit of volatility. If you would invest  484.00  in Adolfo Dominguez SA on September 5, 2024 and sell it today you would earn a total of  26.00  from holding Adolfo Dominguez SA or generate 5.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Fidere Patrimonio SOCIMI  vs.  Adolfo Dominguez SA

Fidere Patrimonio SOCIMI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidere Patrimonio SOCIMI 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.

Adolfo Dominguez

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Adolfo Dominguez SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Adolfo Dominguez is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fidere Patrimonio and Adolfo Dominguez

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

The idea behind Fidere Patrimonio SOCIMI and Adolfo Dominguez 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.