Correlation Between Sacyr SA and IBEX Total

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

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

Diversification Opportunities for Sacyr SA and IBEX Total

0.52

Correlation Coefficient

Sacyr SA  IBEX Total

Very weak diversification

The 3 months correlation between Sacyr and IBEX is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sacyr SA and IBEX Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX Total Return and Sacyr SA 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 Sacyr SA are associated (or correlated) with IBEX Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX Total Return has no effect on the direction of Sacyr SA i.e., Sacyr SA and IBEX Total go up and down completely randomly.

Pair Corralation between Sacyr SA and IBEX Total

Assuming the 90 days trading horizon Sacyr SA is expected to generate 1.03 times less return on investment than IBEX Total. In addition to that, Sacyr SA is 1.49 times more volatile than IBEX Total Return. It trades about 0.11 of its total potential returns per unit of risk. IBEX Total Return is currently generating about 0.17 per unit of volatility. If you would invest  5,016,970  in IBEX Total Return on May 17, 2025 and sell it today you would earn a total of  449,620  from holding IBEX Total Return or generate 8.96% return on investment over 90 days.

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

Sacyr SA  vs.  IBEX Total Return

Pair Trading with Sacyr SA and IBEX Total

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

The idea behind Sacyr SA and IBEX Total Return 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.