Correlation Between Prosegur and Ercros

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

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

Diversification Opportunities for Prosegur and Ercros

-0.11

Correlation Coefficient

Prosegur  Ercros

Good diversification

The 3 months correlation between Prosegur and Ercros is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Prosegur and Ercros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ercros and Prosegur 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 Prosegur are associated (or correlated) with Ercros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ercros has no effect on the direction of Prosegur i.e., Prosegur and Ercros go up and down completely randomly.

Pair Corralation between Prosegur and Ercros

Assuming the 90 days trading horizon Prosegur is expected to generate 1.56 times more return on investment than Ercros. However, Prosegur is 1.56 times more volatile than Ercros. It trades about 0.28 of its potential returns per unit of risk. Ercros is currently generating about 0.04 per unit of risk. If you would invest  219.00  in Prosegur on April 24, 2025 and sell it today you would earn a total of  80.00  from holding Prosegur or generate 36.53% return on investment over 90 days.

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

Prosegur  vs.  Ercros

Prosegur

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prosegur are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Prosegur exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ercros

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ercros are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Ercros is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Prosegur and Ercros

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

The idea behind Prosegur and Ercros 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.