Correlation Between CHESNARA PLC and CIG PANNONIA
Can any of the company-specific risk be diversified away by investing in both CHESNARA PLC and CIG PANNONIA 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 CHESNARA PLC and CIG PANNONIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHESNARA PLC LS 05 and CIG PANNONIA LIFE, you can compare the effects of market volatilities on CHESNARA PLC and CIG PANNONIA 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 CHESNARA PLC with a short position of CIG PANNONIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHESNARA PLC and CIG PANNONIA.
Diversification Opportunities for CHESNARA PLC and CIG PANNONIA
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CHESNARA and CIG is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CHESNARA PLC LS 05 and CIG PANNONIA LIFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIG PANNONIA LIFE and CHESNARA PLC 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 CHESNARA PLC LS 05 are associated (or correlated) with CIG PANNONIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIG PANNONIA LIFE has no effect on the direction of CHESNARA PLC i.e., CHESNARA PLC and CIG PANNONIA go up and down completely randomly.
Pair Corralation between CHESNARA PLC and CIG PANNONIA
Assuming the 90 days horizon CHESNARA PLC is expected to generate 10.41 times less return on investment than CIG PANNONIA. In addition to that, CHESNARA PLC is 1.7 times more volatile than CIG PANNONIA LIFE. It trades about 0.03 of its total potential returns per unit of risk. CIG PANNONIA LIFE is currently generating about 0.48 per unit of volatility. 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 |
CHESNARA PLC LS 05 vs. CIG PANNONIA LIFE
Performance |
| Timeline |
| CHESNARA PLC LS |
| CIG PANNONIA LIFE |
CHESNARA PLC and CIG PANNONIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHESNARA PLC and CIG PANNONIA
The main advantage of trading using opposite CHESNARA PLC and CIG PANNONIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHESNARA PLC position performs unexpectedly, CIG PANNONIA 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 CIG PANNONIA will offset losses from the drop in CIG PANNONIA's long position.| CHESNARA PLC vs. Aluminum of | CHESNARA PLC vs. Wizz Air Holdings | CHESNARA PLC vs. Yuexiu Transport Infrastructure | CHESNARA PLC vs. ADRIATIC METALS LS 013355 |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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