Correlation Between CIG PANNONIA and CHESNARA PLC
Can any of the company-specific risk be diversified away by investing in both CIG PANNONIA and CHESNARA PLC 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 CIG PANNONIA and CHESNARA PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIG PANNONIA LIFE and CHESNARA PLC LS 05, you can compare the effects of market volatilities on CIG PANNONIA and CHESNARA PLC 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 CIG PANNONIA with a short position of CHESNARA PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIG PANNONIA and CHESNARA PLC.
Diversification Opportunities for CIG PANNONIA and CHESNARA PLC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CIG and CHESNARA is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CIG PANNONIA LIFE and CHESNARA PLC LS 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHESNARA PLC LS and CIG PANNONIA 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 CIG PANNONIA LIFE are associated (or correlated) with CHESNARA PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHESNARA PLC LS has no effect on the direction of CIG PANNONIA i.e., CIG PANNONIA and CHESNARA PLC go up and down completely randomly.
Pair Corralation between CIG PANNONIA and CHESNARA PLC
Assuming the 90 days trading horizon CIG PANNONIA LIFE is expected to generate 0.59 times more return on investment than CHESNARA PLC. However, CIG PANNONIA LIFE is 1.7 times less risky than CHESNARA PLC. It trades about 0.48 of its potential returns per unit of risk. CHESNARA PLC LS 05 is currently generating about 0.03 per unit of risk. If you would invest 85.00 in CIG PANNONIA LIFE on October 25, 2024 and sell it today you would earn a total of 11.00 from holding CIG PANNONIA LIFE or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
CIG PANNONIA LIFE vs. CHESNARA PLC LS 05
Performance |
| Timeline |
| CIG PANNONIA LIFE |
| CHESNARA PLC LS |
CIG PANNONIA and CHESNARA PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIG PANNONIA and CHESNARA PLC
The main advantage of trading using opposite CIG PANNONIA and CHESNARA PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIG PANNONIA position performs unexpectedly, CHESNARA PLC 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 CHESNARA PLC will offset losses from the drop in CHESNARA PLC's long position.| CIG PANNONIA vs. Diamyd Medical AB | CIG PANNONIA vs. Meli Hotels International | CIG PANNONIA vs. Park Hotels Resorts | CIG PANNONIA vs. Apollo Medical Holdings |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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