Correlation Between CK Infrastructure and Terna Rete
Can any of the company-specific risk be diversified away by investing in both CK Infrastructure and Terna Rete 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 CK Infrastructure and Terna Rete into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Infrastructure Holdings and Terna Rete, you can compare the effects of market volatilities on CK Infrastructure and Terna Rete 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 CK Infrastructure with a short position of Terna Rete. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Infrastructure and Terna Rete.
Diversification Opportunities for CK Infrastructure and Terna Rete
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between CHH and Terna is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding CK Infrastructure Holdings and Terna Rete in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terna Rete and CK Infrastructure 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 CK Infrastructure Holdings are associated (or correlated) with Terna Rete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terna Rete has no effect on the direction of CK Infrastructure i.e., CK Infrastructure and Terna Rete go up and down completely randomly.
Pair Corralation between CK Infrastructure and Terna Rete
Assuming the 90 days horizon CK Infrastructure Holdings is expected to generate 2.71 times more return on investment than Terna Rete. However, CK Infrastructure is 2.71 times more volatile than Terna Rete. It trades about 0.02 of its potential returns per unit of risk. Terna Rete is currently generating about -0.03 per unit of risk. If you would invest 620.00 in CK Infrastructure Holdings on September 12, 2024 and sell it today you would earn a total of 8.00 from holding CK Infrastructure Holdings or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Infrastructure Holdings vs. Terna Rete
Performance |
| Timeline |
| CK Infrastructure |
| Terna Rete |
CK Infrastructure and Terna Rete Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Infrastructure and Terna Rete
The main advantage of trading using opposite CK Infrastructure and Terna Rete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Infrastructure position performs unexpectedly, Terna Rete 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 Terna Rete will offset losses from the drop in Terna Rete's long position.| CK Infrastructure vs. INDO RAMA SYNTHETIC | CK Infrastructure vs. STMICROELECTRONICS | CK Infrastructure vs. Eastman Chemical | CK Infrastructure vs. Arrow Electronics |
| Terna Rete vs. MAGNUM MINING EXP | Terna Rete vs. CompuGroup Medical SE | Terna Rete vs. TOREX SEMICONDUCTOR LTD | Terna Rete vs. GRIFFIN MINING LTD |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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