Correlation Between Realia and Prosegur

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

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

Diversification Opportunities for Realia and Prosegur

0.25

Correlation Coefficient

Realia  Prosegur

Modest diversification

The 3 months correlation between Realia and Prosegur is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Realia and Prosegur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosegur and Realia 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 Realia are associated (or correlated) with Prosegur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosegur has no effect on the direction of Realia i.e., Realia and Prosegur go up and down completely randomly.

Pair Corralation between Realia and Prosegur

Assuming the 90 days trading horizon Realia is expected to generate 17.11 times less return on investment than Prosegur. But when comparing it to its historical volatility, Realia is 1.12 times less risky than Prosegur. It trades about 0.02 of its potential returns per unit of risk. Prosegur is currently generating about 0.28 of returns per unit of risk over similar time horizon. 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Realia  vs.  Prosegur

Realia

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Realia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Realia is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Realia and Prosegur

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

The idea behind Realia and Prosegur 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.