Correlation Between Abra Information and Inrom Construction
Can any of the company-specific risk be diversified away by investing in both Abra Information and Inrom Construction 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 Abra Information and Inrom Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abra Information Technologies and Inrom Construction Industries, you can compare the effects of market volatilities on Abra Information and Inrom Construction 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 Abra Information with a short position of Inrom Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abra Information and Inrom Construction.
Diversification Opportunities for Abra Information and Inrom Construction
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abra and Inrom is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Abra Information Technologies and Inrom Construction Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inrom Construction and Abra Information 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 Abra Information Technologies are associated (or correlated) with Inrom Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inrom Construction has no effect on the direction of Abra Information i.e., Abra Information and Inrom Construction go up and down completely randomly.
Pair Corralation between Abra Information and Inrom Construction
Assuming the 90 days trading horizon Abra Information Technologies is expected to under-perform the Inrom Construction. But the stock apears to be less risky and, when comparing its historical volatility, Abra Information Technologies is 1.18 times less risky than Inrom Construction. The stock trades about -0.43 of its potential returns per unit of risk. The Inrom Construction Industries is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 130,269 in Inrom Construction Industries on August 29, 2024 and sell it today you would earn a total of 27,031 from holding Inrom Construction Industries or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abra Information Technologies vs. Inrom Construction Industries
Performance |
| Timeline |
| Abra Information Tec |
| Inrom Construction |
Abra Information and Inrom Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abra Information and Inrom Construction
The main advantage of trading using opposite Abra Information and Inrom Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abra Information position performs unexpectedly, Inrom Construction 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 Inrom Construction will offset losses from the drop in Inrom Construction's long position.| Abra Information vs. Nice | Abra Information vs. WhiteSmoke Software | Abra Information vs. Nrgene Technologies |
| Inrom Construction vs. Ormat Technologies | Inrom Construction vs. Multi Retail Group | Inrom Construction vs. Nova | Inrom Construction vs. B Communications |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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