Correlation Between CIG Pannonia and Appeninn Nyrt
Can any of the company-specific risk be diversified away by investing in both CIG Pannonia and Appeninn Nyrt 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 CIG Pannonia and Appeninn Nyrt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIG Pannonia Life and Appeninn Nyrt, you can compare the effects of market volatilities on CIG Pannonia and Appeninn Nyrt 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 CIG Pannonia with a short position of Appeninn Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIG Pannonia and Appeninn Nyrt.
Diversification Opportunities for CIG Pannonia and Appeninn Nyrt
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CIG and Appeninn is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CIG Pannonia Life and Appeninn Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appeninn Nyrt and CIG Pannonia 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 CIG Pannonia Life are associated (or correlated) with Appeninn Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appeninn Nyrt has no effect on the direction of CIG Pannonia i.e., CIG Pannonia and Appeninn Nyrt go up and down completely randomly.
Pair Corralation between CIG Pannonia and Appeninn Nyrt
Assuming the 90 days trading horizon CIG Pannonia is expected to generate 1.64 times less return on investment than Appeninn Nyrt. But when comparing it to its historical volatility, CIG Pannonia Life is 1.33 times less risky than Appeninn Nyrt. It trades about 0.18 of its potential returns per unit of risk. Appeninn Nyrt is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 63,400 in Appeninn Nyrt on August 27, 2024 and sell it today you would earn a total of 5,800 from holding Appeninn Nyrt or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIG Pannonia Life vs. Appeninn Nyrt
Performance |
| Timeline |
| CIG Pannonia Life |
| Appeninn Nyrt |
CIG Pannonia and Appeninn Nyrt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIG Pannonia and Appeninn Nyrt
The main advantage of trading using opposite CIG Pannonia and Appeninn Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIG Pannonia position performs unexpectedly, Appeninn Nyrt 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 Appeninn Nyrt will offset losses from the drop in Appeninn Nyrt's long position.| CIG Pannonia vs. Appeninn Nyrt | CIG Pannonia vs. Raba Jarmuipari Holding | CIG Pannonia vs. NordTelekom Telecommunications Service | CIG Pannonia vs. OPUS GLOBAL Nyrt |
| Appeninn Nyrt vs. Delta Technologies Nyrt | Appeninn Nyrt vs. NordTelekom Telecommunications Service | Appeninn Nyrt vs. Infineon Technologies AG | Appeninn Nyrt vs. OTP Bank Nyrt |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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