Correlation Between Elecnor SA and Tubacex SA

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

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

Diversification Opportunities for Elecnor SA and Tubacex SA

0.62

Correlation Coefficient

Elecnor SA  Tubacex SA

Poor diversification

The 3 months correlation between Elecnor and Tubacex is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Elecnor SA and Tubacex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tubacex SA and Elecnor SA 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 Elecnor SA are associated (or correlated) with Tubacex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tubacex SA has no effect on the direction of Elecnor SA i.e., Elecnor SA and Tubacex SA go up and down completely randomly.

Pair Corralation between Elecnor SA and Tubacex SA

Assuming the 90 days trading horizon Elecnor SA is expected to generate 1.2 times more return on investment than Tubacex SA. However, Elecnor SA is 1.2 times more volatile than Tubacex SA. It trades about 0.25 of its potential returns per unit of risk. Tubacex SA is currently generating about 0.03 per unit of risk. If you would invest  1,658  in Elecnor SA on April 24, 2025 and sell it today you would earn a total of  677.00  from holding Elecnor SA or generate 40.83% return on investment over 90 days.

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

Elecnor SA  vs.  Tubacex SA

Elecnor SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Elecnor SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Elecnor SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tubacex SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tubacex SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Tubacex SA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Elecnor SA and Tubacex SA

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

The idea behind Elecnor SA and Tubacex 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.