Correlation Between Cresud SACIF and Archer Daniels

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

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

Diversification Opportunities for Cresud SACIF and Archer Daniels

0.65

Correlation Coefficient

Cresud SACIF  Archer Daniels

Poor diversification

The 3 months correlation between Cresud and Archer is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Archer Daniels Midland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Daniels Midland and Cresud SACIF 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 Cresud SACIF y are associated (or correlated) with Archer Daniels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Daniels Midland has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Archer Daniels go up and down completely randomly.

Pair Corralation between Cresud SACIF and Archer Daniels

Assuming the 90 days horizon Cresud SACIF y is expected to generate 1.65 times more return on investment than Archer Daniels. However, Cresud SACIF is 1.65 times more volatile than Archer Daniels Midland. It trades about 0.05 of its potential returns per unit of risk. Archer Daniels Midland is currently generating about -0.02 per unit of risk. If you would invest  580.00  in Cresud SACIF y on February 4, 2024 and sell it today you would earn a total of  397.00  from holding Cresud SACIF y or generate 68.45% return on investment over 90 days.

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

Cresud SACIF y  vs.  Archer Daniels Midland

Cresud SACIF y

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Cresud SACIF may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Archer Daniels Midland

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Archer Daniels Midland are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Archer Daniels may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Cresud SACIF and Archer Daniels

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

The idea behind Cresud SACIF y and Archer Daniels Midland 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.