Correlation Between Biofarm Bucure and TRANSILVANIA LEASING
Can any of the company-specific risk be diversified away by investing in both Biofarm Bucure and TRANSILVANIA LEASING 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 Biofarm Bucure and TRANSILVANIA LEASING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biofarm Bucure and TRANSILVANIA LEASING SI, you can compare the effects of market volatilities on Biofarm Bucure and TRANSILVANIA LEASING 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 Biofarm Bucure with a short position of TRANSILVANIA LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofarm Bucure and TRANSILVANIA LEASING.
Diversification Opportunities for Biofarm Bucure and TRANSILVANIA LEASING
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Biofarm and TRANSILVANIA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Biofarm Bucure and TRANSILVANIA LEASING SI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA LEASING and Biofarm Bucure 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 Biofarm Bucure are associated (or correlated) with TRANSILVANIA LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA LEASING has no effect on the direction of Biofarm Bucure i.e., Biofarm Bucure and TRANSILVANIA LEASING go up and down completely randomly.
Pair Corralation between Biofarm Bucure and TRANSILVANIA LEASING
Assuming the 90 days trading horizon Biofarm Bucure is expected to under-perform the TRANSILVANIA LEASING. But the stock apears to be less risky and, when comparing its historical volatility, Biofarm Bucure is 3.83 times less risky than TRANSILVANIA LEASING. The stock trades about -0.1 of its potential returns per unit of risk. The TRANSILVANIA LEASING SI is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8.45 in TRANSILVANIA LEASING SI on November 3, 2024 and sell it today you would earn a total of 0.10 from holding TRANSILVANIA LEASING SI or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biofarm Bucure vs. TRANSILVANIA LEASING SI
Performance |
| Timeline |
| Biofarm Bucure |
| TRANSILVANIA LEASING |
Biofarm Bucure and TRANSILVANIA LEASING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biofarm Bucure and TRANSILVANIA LEASING
The main advantage of trading using opposite Biofarm Bucure and TRANSILVANIA LEASING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofarm Bucure position performs unexpectedly, TRANSILVANIA LEASING 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 TRANSILVANIA LEASING will offset losses from the drop in TRANSILVANIA LEASING's long position.| Biofarm Bucure vs. Oil Terminal C | Biofarm Bucure vs. Antibiotice Ia | Biofarm Bucure vs. Aages SA | Biofarm Bucure vs. Alumil Rom Industry |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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