Correlation Between Grifols SA and Audax Renovables

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

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

Diversification Opportunities for Grifols SA and Audax Renovables

0.13

Correlation Coefficient

Grifols SA  Audax Renovables

Average diversification

The 3 months correlation between Grifols and Audax is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Grifols SA and Audax Renovables SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Audax Renovables and Grifols 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 Grifols SA are associated (or correlated) with Audax Renovables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Audax Renovables has no effect on the direction of Grifols SA i.e., Grifols SA and Audax Renovables go up and down completely randomly.

Pair Corralation between Grifols SA and Audax Renovables

Assuming the 90 days trading horizon Grifols SA is expected to generate 1.27 times more return on investment than Audax Renovables. However, Grifols SA is 1.27 times more volatile than Audax Renovables SA. It trades about 0.27 of its potential returns per unit of risk. Audax Renovables SA is currently generating about 0.03 per unit of risk. If you would invest  851.00  in Grifols SA on April 25, 2025 and sell it today you would earn a total of  338.00  from holding Grifols SA or generate 39.72% return on investment over 90 days.

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

Grifols SA  vs.  Audax Renovables SA

Grifols SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grifols SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Grifols SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Audax Renovables

Risk-Adjusted Performance

Weak

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

Pair Trading with Grifols SA and Audax Renovables

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

The idea behind Grifols SA and Audax Renovables 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.