Correlation Between Granite 3x and Infotel SA
Can any of the company-specific risk be diversified away by investing in both Granite 3x and Infotel SA 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 Granite 3x and Infotel SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite 3x LVMH and Infotel SA, you can compare the effects of market volatilities on Granite 3x and Infotel SA 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 Granite 3x with a short position of Infotel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Infotel SA.
Diversification Opportunities for Granite 3x and Infotel SA
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Infotel is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH and Infotel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infotel SA and Granite 3x 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 Granite 3x LVMH are associated (or correlated) with Infotel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infotel SA has no effect on the direction of Granite 3x i.e., Granite 3x and Infotel SA go up and down completely randomly.
Pair Corralation between Granite 3x and Infotel SA
Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the Infotel SA. In addition to that, Granite 3x is 23.4 times more volatile than Infotel SA. It trades about -0.21 of its total potential returns per unit of risk. Infotel SA is currently generating about 0.14 per unit of volatility. If you would invest 4,260 in Infotel SA on August 28, 2024 and sell it today you would earn a total of 30.00 from holding Infotel SA or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Granite 3x LVMH vs. Infotel SA
Performance |
| Timeline |
| Granite 3x LVMH |
| Infotel SA |
Granite 3x and Infotel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite 3x and Infotel SA
The main advantage of trading using opposite Granite 3x and Infotel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x position performs unexpectedly, Infotel SA 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 Infotel SA will offset losses from the drop in Infotel SA's long position.| Granite 3x vs. Lyxor UCITS Japan | Granite 3x vs. Lyxor UCITS Japan | Granite 3x vs. Lyxor UCITS Stoxx | Granite 3x vs. Amundi CAC 40 |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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