Correlation Between Wool Industry and Nafpaktos Textile
Can any of the company-specific risk be diversified away by investing in both Wool Industry and Nafpaktos Textile 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 Wool Industry and Nafpaktos Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wool Industry Tria and Nafpaktos Textile Industry, you can compare the effects of market volatilities on Wool Industry and Nafpaktos Textile 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 Wool Industry with a short position of Nafpaktos Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wool Industry and Nafpaktos Textile.
Diversification Opportunities for Wool Industry and Nafpaktos Textile
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wool and Nafpaktos is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wool Industry Tria and Nafpaktos Textile Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafpaktos Textile and Wool Industry 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 Wool Industry Tria are associated (or correlated) with Nafpaktos Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafpaktos Textile has no effect on the direction of Wool Industry i.e., Wool Industry and Nafpaktos Textile go up and down completely randomly.
Pair Corralation between Wool Industry and Nafpaktos Textile
Assuming the 90 days trading horizon Wool Industry Tria is expected to generate 1.82 times more return on investment than Nafpaktos Textile. However, Wool Industry is 1.82 times more volatile than Nafpaktos Textile Industry. It trades about 0.08 of its potential returns per unit of risk. Nafpaktos Textile Industry is currently generating about 0.02 per unit of risk. If you would invest 448.00 in Wool Industry Tria on November 9, 2024 and sell it today you would earn a total of 32.00 from holding Wool Industry Tria or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.73% |
| Values | Daily Returns |
Wool Industry Tria vs. Nafpaktos Textile Industry
Performance |
| Timeline |
| Wool Industry Tria |
| Nafpaktos Textile |
Wool Industry and Nafpaktos Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wool Industry and Nafpaktos Textile
The main advantage of trading using opposite Wool Industry and Nafpaktos Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wool Industry position performs unexpectedly, Nafpaktos Textile 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 Nafpaktos Textile will offset losses from the drop in Nafpaktos Textile's long position.The idea behind Wool Industry Tria and Nafpaktos Textile Industry 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.| Nafpaktos Textile vs. Elton International Trading | Nafpaktos Textile vs. Optima bank SA | Nafpaktos Textile vs. Optronics Technologies SA | Nafpaktos Textile vs. Eurobank Ergasias Services |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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