Correlation Between Redeia Corporacion and Merlin Properties
Can any of the company-specific risk be diversified away by investing in both Redeia Corporacion and Merlin Properties 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 Redeia Corporacion and Merlin Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redeia Corporacion SA and Merlin Properties SOCIMI, you can compare the effects of market volatilities on Redeia Corporacion and Merlin Properties 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 Redeia Corporacion with a short position of Merlin Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redeia Corporacion and Merlin Properties.
Diversification Opportunities for Redeia Corporacion and Merlin Properties
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Redeia and Merlin is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Redeia Corporacion SA and Merlin Properties SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merlin Properties SOCIMI and Redeia Corporacion 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 Redeia Corporacion SA are associated (or correlated) with Merlin Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merlin Properties SOCIMI has no effect on the direction of Redeia Corporacion i.e., Redeia Corporacion and Merlin Properties go up and down completely randomly.
Pair Corralation between Redeia Corporacion and Merlin Properties
Assuming the 90 days trading horizon Redeia Corporacion SA is expected to under-perform the Merlin Properties. In addition to that, Redeia Corporacion is 1.1 times more volatile than Merlin Properties SOCIMI. It trades about -0.07 of its total potential returns per unit of risk. Merlin Properties SOCIMI is currently generating about 0.32 per unit of volatility. If you would invest 966.00 in Merlin Properties SOCIMI on April 22, 2025 and sell it today you would earn a total of 197.00 from holding Merlin Properties SOCIMI or generate 20.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Redeia Corporacion SA vs. Merlin Properties SOCIMI
Performance |
Timeline |
Redeia Corporacion |
Merlin Properties SOCIMI |
Redeia Corporacion and Merlin Properties Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Redeia Corporacion and Merlin Properties
The main advantage of trading using opposite Redeia Corporacion and Merlin Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redeia Corporacion position performs unexpectedly, Merlin Properties 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 Merlin Properties will offset losses from the drop in Merlin Properties' long position.Redeia Corporacion vs. Sacyr SA | Redeia Corporacion vs. eDreams Odigeo SA | Redeia Corporacion vs. Vitruvio Real Estate | Redeia Corporacion vs. Merlin Properties SOCIMI |
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Check out your portfolio center.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.
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