Correlation Between INPOST SA and Transcontinental
Can any of the company-specific risk be diversified away by investing in both INPOST SA and Transcontinental 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 INPOST SA and Transcontinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INPOST SA EO and Transcontinental, you can compare the effects of market volatilities on INPOST SA and Transcontinental 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 INPOST SA with a short position of Transcontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of INPOST SA and Transcontinental.
Diversification Opportunities for INPOST SA and Transcontinental
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INPOST and Transcontinental is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding INPOST SA EO and Transcontinental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcontinental and INPOST 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 INPOST SA EO are associated (or correlated) with Transcontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcontinental has no effect on the direction of INPOST SA i.e., INPOST SA and Transcontinental go up and down completely randomly.
Pair Corralation between INPOST SA and Transcontinental
Assuming the 90 days horizon INPOST SA is expected to generate 1.33 times less return on investment than Transcontinental. But when comparing it to its historical volatility, INPOST SA EO is 1.2 times less risky than Transcontinental. It trades about 0.21 of its potential returns per unit of risk. Transcontinental is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,139 in Transcontinental on October 10, 2024 and sell it today you would earn a total of 71.00 from holding Transcontinental or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INPOST SA EO vs. Transcontinental
Performance |
| Timeline |
| INPOST SA EO |
| Transcontinental |
INPOST SA and Transcontinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INPOST SA and Transcontinental
The main advantage of trading using opposite INPOST SA and Transcontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INPOST SA position performs unexpectedly, Transcontinental 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 Transcontinental will offset losses from the drop in Transcontinental's long position.| INPOST SA vs. ARDAGH METAL PACDL 0001 | INPOST SA vs. Daito Trust Construction | INPOST SA vs. Federal Agricultural Mortgage | INPOST SA vs. North American Construction |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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