Correlation Between Linea Directa and Instalco Intressenter

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

By analyzing existing cross correlation between Linea Directa Aseguradora and Instalco Intressenter AB, you can compare the effects of market volatilities on Linea Directa and Instalco Intressenter 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 Linea Directa with a short position of Instalco Intressenter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linea Directa and Instalco Intressenter.

Diversification Opportunities for Linea Directa and Instalco Intressenter

-0.71

Correlation Coefficient

Linea Directa  Instalco Intressenter

Pay attention - limited upside

The 3 months correlation between Linea and Instalco is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Linea Directa Aseguradora and Instalco Intressenter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instalco Intressenter and Linea Directa 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 Linea Directa Aseguradora are associated (or correlated) with Instalco Intressenter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instalco Intressenter has no effect on the direction of Linea Directa i.e., Linea Directa and Instalco Intressenter go up and down completely randomly.

Pair Corralation between Linea Directa and Instalco Intressenter

Assuming the 90 days trading horizon Linea Directa Aseguradora is expected to generate 0.38 times more return on investment than Instalco Intressenter. However, Linea Directa Aseguradora is 2.66 times less risky than Instalco Intressenter. It trades about 0.16 of its potential returns per unit of risk. Instalco Intressenter AB is currently generating about -0.01 per unit of risk. If you would invest  116.00  in Linea Directa Aseguradora on April 20, 2025 and sell it today you would earn a total of  19.00  from holding Linea Directa Aseguradora or generate 16.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

Linea Directa Aseguradora  vs.  Instalco Intressenter AB

Linea Directa Aseguradora

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Linea Directa Aseguradora are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Linea Directa exhibited solid returns over the last few months and may actually be approaching a breakup point.

Instalco Intressenter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Instalco Intressenter AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Instalco Intressenter is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Linea Directa and Instalco Intressenter

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

The idea behind Linea Directa Aseguradora and Instalco Intressenter AB 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.