Correlation Between Industria and General De

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

By analyzing existing cross correlation between Industria de Diseno and General de Alquiler, you can compare the effects of market volatilities on Industria and General De 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 Industria with a short position of General De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industria and General De.

Diversification Opportunities for Industria and General De

-0.43

Correlation Coefficient

Industria  General De

Very good diversification

The 3 months correlation between Industria and General is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and General de Alquiler in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General de Alquiler and Industria 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 Industria de Diseno are associated (or correlated) with General De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General de Alquiler has no effect on the direction of Industria i.e., Industria and General De go up and down completely randomly.

Pair Corralation between Industria and General De

Assuming the 90 days trading horizon Industria de Diseno is expected to under-perform the General De. But the stock apears to be less risky and, when comparing its historical volatility, Industria de Diseno is 1.2 times less risky than General De. The stock trades about -0.12 of its potential returns per unit of risk. The General de Alquiler is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  124.00  in General de Alquiler on April 22, 2025 and sell it today you would earn a total of  6.00  from holding General de Alquiler or generate 4.84% return on investment over 90 days.

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

Industria de Diseno  vs.  General de Alquiler

Industria de Diseno

Risk-Adjusted Performance

Very Weak

Over the last 90 days Industria de Diseno has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

General de Alquiler

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in General de Alquiler are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, General De is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Industria and General De

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

The idea behind Industria de Diseno and General de Alquiler 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.