Correlation Between Redeia Corporacion and Pharma Mar

Can any of the company-specific risk be diversified away by investing in both Redeia Corporacion and Pharma Mar 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 Pharma Mar 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 Pharma Mar SA, you can compare the effects of market volatilities on Redeia Corporacion and Pharma Mar 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 Pharma Mar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redeia Corporacion and Pharma Mar.

Diversification Opportunities for Redeia Corporacion and Pharma Mar

-0.12

Correlation Coefficient

Redeia Corporacion  Pharma Mar

Good diversification

The 3 months correlation between Redeia and Pharma is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Redeia Corporacion SA and Pharma Mar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharma Mar SA 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 Pharma Mar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharma Mar SA has no effect on the direction of Redeia Corporacion i.e., Redeia Corporacion and Pharma Mar go up and down completely randomly.

Pair Corralation between Redeia Corporacion and Pharma Mar

Assuming the 90 days trading horizon Redeia Corporacion SA is expected to under-perform the Pharma Mar. But the stock apears to be less risky and, when comparing its historical volatility, Redeia Corporacion SA is 2.91 times less risky than Pharma Mar. The stock trades about -0.03 of its potential returns per unit of risk. The Pharma Mar SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  8,030  in Pharma Mar SA on April 24, 2025 and sell it today you would lose (210.00) from holding Pharma Mar SA or give up 2.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Redeia Corporacion SA  vs.  Pharma Mar SA

Redeia Corporacion

Risk-Adjusted Performance

Very Weak

Over the last 90 days Redeia Corporacion SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Redeia Corporacion is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pharma Mar SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pharma Mar SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Pharma Mar is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Redeia Corporacion and Pharma Mar

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

The idea behind Redeia Corporacion SA and Pharma Mar 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.