Correlation Between GRUPUL INDUSTRIAL and Alumil Rom
Can any of the company-specific risk be diversified away by investing in both GRUPUL INDUSTRIAL and Alumil Rom 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 GRUPUL INDUSTRIAL and Alumil Rom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRUPUL INDUSTRIAL ELECTROCONTACT and Alumil Rom Industry, you can compare the effects of market volatilities on GRUPUL INDUSTRIAL and Alumil Rom 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 GRUPUL INDUSTRIAL with a short position of Alumil Rom. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPUL INDUSTRIAL and Alumil Rom.
Diversification Opportunities for GRUPUL INDUSTRIAL and Alumil Rom
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GRUPUL and Alumil is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding GRUPUL INDUSTRIAL ELECTROCONTA and Alumil Rom Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumil Rom Industry and GRUPUL INDUSTRIAL 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 GRUPUL INDUSTRIAL ELECTROCONTACT are associated (or correlated) with Alumil Rom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumil Rom Industry has no effect on the direction of GRUPUL INDUSTRIAL i.e., GRUPUL INDUSTRIAL and Alumil Rom go up and down completely randomly.
Pair Corralation between GRUPUL INDUSTRIAL and Alumil Rom
Assuming the 90 days trading horizon GRUPUL INDUSTRIAL is expected to generate 1.19 times less return on investment than Alumil Rom. In addition to that, GRUPUL INDUSTRIAL is 1.82 times more volatile than Alumil Rom Industry. It trades about 0.04 of its total potential returns per unit of risk. Alumil Rom Industry is currently generating about 0.08 per unit of volatility. If you would invest 191.00 in Alumil Rom Industry on September 14, 2024 and sell it today you would earn a total of 87.00 from holding Alumil Rom Industry or generate 45.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.97% |
| Values | Daily Returns |
GRUPUL INDUSTRIAL ELECTROCONTA vs. Alumil Rom Industry
Performance |
| Timeline |
| GRUPUL INDUSTRIAL |
| Alumil Rom Industry |
GRUPUL INDUSTRIAL and Alumil Rom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRUPUL INDUSTRIAL and Alumil Rom
The main advantage of trading using opposite GRUPUL INDUSTRIAL and Alumil Rom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPUL INDUSTRIAL position performs unexpectedly, Alumil Rom 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 Alumil Rom will offset losses from the drop in Alumil Rom's long position.| GRUPUL INDUSTRIAL vs. TRANSILVANIA INVESTMENTS ALLIANCE | GRUPUL INDUSTRIAL vs. Remarul 16 Februarie | GRUPUL INDUSTRIAL vs. TRANSILVANIA LEASING SI | GRUPUL INDUSTRIAL vs. Biofarm Bucure |
| Alumil Rom vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Alumil Rom vs. IM Vinaria Purcari | Alumil Rom vs. IHUNT TECHNOLOGY IMPORT EXPORT | Alumil Rom vs. Erste Group Bank |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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