Correlation Between Borges Agricultural and Nueva Expresin

Can any of the company-specific risk be diversified away by investing in both Borges Agricultural and Nueva Expresin 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 Borges Agricultural and Nueva Expresin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Borges Agricultural Industrial and Nueva Expresin Textil, you can compare the effects of market volatilities on Borges Agricultural and Nueva Expresin 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 Borges Agricultural with a short position of Nueva Expresin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borges Agricultural and Nueva Expresin.

Diversification Opportunities for Borges Agricultural and Nueva Expresin

-0.02

Correlation Coefficient

Borges Agricultural  Nueva Expresin

Good diversification

The 3 months correlation between Borges and Nueva is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Borges Agricultural Industrial and Nueva Expresin Textil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nueva Expresin Textil and Borges Agricultural 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 Borges Agricultural Industrial are associated (or correlated) with Nueva Expresin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nueva Expresin Textil has no effect on the direction of Borges Agricultural i.e., Borges Agricultural and Nueva Expresin go up and down completely randomly.

Pair Corralation between Borges Agricultural and Nueva Expresin

Assuming the 90 days trading horizon Borges Agricultural Industrial is expected to under-perform the Nueva Expresin. But the stock apears to be less risky and, when comparing its historical volatility, Borges Agricultural Industrial is 4.62 times less risky than Nueva Expresin. The stock trades about -0.04 of its potential returns per unit of risk. The Nueva Expresin Textil is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Nueva Expresin Textil on March 19, 2025 and sell it today you would earn a total of  8.00  from holding Nueva Expresin Textil or generate 22.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Borges Agricultural Industrial  vs.  Nueva Expresin Textil

Borges Agricultural

Risk-Adjusted Performance

Very Weak

Over the last 90 days Borges Agricultural Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Borges Agricultural is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Nueva Expresin Textil

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nueva Expresin Textil are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Nueva Expresin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Borges Agricultural and Nueva Expresin

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

The idea behind Borges Agricultural Industrial and Nueva Expresin Textil 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.