Correlation Between Concepcion Industrial and Metro Retail

Can any of the company-specific risk be diversified away by investing in both Concepcion Industrial and Metro Retail 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 Concepcion Industrial and Metro Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Concepcion Industrial Corp and Metro Retail Stores, you can compare the effects of market volatilities on Concepcion Industrial and Metro Retail 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 Concepcion Industrial with a short position of Metro Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concepcion Industrial and Metro Retail.

Diversification Opportunities for Concepcion Industrial and Metro Retail

-0.3

Correlation Coefficient

Concepcion Industrial  Metro Retail

Very good diversification

The 3 months correlation between Concepcion and Metro is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp and Metro Retail Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Retail Stores and Concepcion Industrial 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 Concepcion Industrial Corp are associated (or correlated) with Metro Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Retail Stores has no effect on the direction of Concepcion Industrial i.e., Concepcion Industrial and Metro Retail go up and down completely randomly.

Pair Corralation between Concepcion Industrial and Metro Retail

Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to generate 1.12 times more return on investment than Metro Retail. However, Concepcion Industrial is 1.12 times more volatile than Metro Retail Stores. It trades about 0.14 of its potential returns per unit of risk. Metro Retail Stores is currently generating about -0.04 per unit of risk. If you would invest  1,300  in Concepcion Industrial Corp on April 13, 2025 and sell it today you would earn a total of  200.00  from holding Concepcion Industrial Corp or generate 15.38% return on investment over 90 days.

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

Concepcion Industrial Corp  vs.  Metro Retail Stores

Concepcion Industrial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Concepcion Industrial Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Concepcion Industrial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Metro Retail Stores

Risk-Adjusted Performance

Very Weak

Over the last 90 days Metro Retail Stores has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Metro Retail is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Concepcion Industrial and Metro Retail

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

The idea behind Concepcion Industrial Corp and Metro Retail Stores 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.