Correlation Between Arteche Lantegi and Merlin Properties

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

By analyzing existing cross correlation between Arteche Lantegi Elkartea and Merlin Properties SOCIMI, you can compare the effects of market volatilities on Arteche Lantegi and Merlin 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 Arteche Lantegi with a short position of Merlin Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arteche Lantegi and Merlin Properties.

Diversification Opportunities for Arteche Lantegi and Merlin Properties

0.93

Correlation Coefficient

Arteche Lantegi  Merlin Properties

Almost no diversification

The 3 months correlation between Arteche and Merlin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Arteche Lantegi Elkartea and Merlin Properties SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merlin Properties SOCIMI and Arteche Lantegi 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 Arteche Lantegi Elkartea are associated (or correlated) with Merlin Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merlin Properties SOCIMI has no effect on the direction of Arteche Lantegi i.e., Arteche Lantegi and Merlin Properties go up and down completely randomly.

Pair Corralation between Arteche Lantegi and Merlin Properties

Assuming the 90 days trading horizon Arteche Lantegi Elkartea is expected to generate 3.49 times more return on investment than Merlin Properties. However, Arteche Lantegi is 3.49 times more volatile than Merlin Properties SOCIMI. It trades about 0.22 of its potential returns per unit of risk. Merlin Properties SOCIMI is currently generating about 0.3 per unit of risk. If you would invest  782.00  in Arteche Lantegi Elkartea on April 21, 2025 and sell it today you would earn a total of  398.00  from holding Arteche Lantegi Elkartea or generate 50.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Arteche Lantegi Elkartea  vs.  Merlin Properties SOCIMI

Arteche Lantegi Elkartea

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Arteche Lantegi Elkartea are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Arteche Lantegi exhibited solid returns over the last few months and may actually be approaching a breakup point.

Merlin Properties SOCIMI

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Merlin Properties SOCIMI are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Merlin Properties exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arteche Lantegi and Merlin Properties

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

The idea behind Arteche Lantegi Elkartea and Merlin 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.