Correlation Between GRUPUL INDUSTRIAL and Evergent Investments
Can any of the company-specific risk be diversified away by investing in both GRUPUL INDUSTRIAL and Evergent Investments 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 Evergent Investments 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 Evergent Investments SA, you can compare the effects of market volatilities on GRUPUL INDUSTRIAL and Evergent Investments 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 Evergent Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPUL INDUSTRIAL and Evergent Investments.
Diversification Opportunities for GRUPUL INDUSTRIAL and Evergent Investments
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GRUPUL and Evergent is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding GRUPUL INDUSTRIAL ELECTROCONTA and Evergent Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergent Investments 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 Evergent Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergent Investments has no effect on the direction of GRUPUL INDUSTRIAL i.e., GRUPUL INDUSTRIAL and Evergent Investments go up and down completely randomly.
Pair Corralation between GRUPUL INDUSTRIAL and Evergent Investments
Assuming the 90 days trading horizon GRUPUL INDUSTRIAL ELECTROCONTACT is expected to generate 13.44 times more return on investment than Evergent Investments. However, GRUPUL INDUSTRIAL is 13.44 times more volatile than Evergent Investments SA. It trades about 0.22 of its potential returns per unit of risk. Evergent Investments SA is currently generating about -0.13 per unit of risk. If you would invest 4.45 in GRUPUL INDUSTRIAL ELECTROCONTACT on November 4, 2024 and sell it today you would earn a total of 1.35 from holding GRUPUL INDUSTRIAL ELECTROCONTACT or generate 30.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRUPUL INDUSTRIAL ELECTROCONTA vs. Evergent Investments SA
Performance |
| Timeline |
| GRUPUL INDUSTRIAL |
| Evergent Investments |
GRUPUL INDUSTRIAL and Evergent Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRUPUL INDUSTRIAL and Evergent Investments
The main advantage of trading using opposite GRUPUL INDUSTRIAL and Evergent Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPUL INDUSTRIAL position performs unexpectedly, Evergent Investments 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 Evergent Investments will offset losses from the drop in Evergent Investments' long position.| GRUPUL INDUSTRIAL vs. Safetech Innovations SA | GRUPUL INDUSTRIAL vs. Evergent Investments SA | GRUPUL INDUSTRIAL vs. IM Vinaria Purcari | GRUPUL INDUSTRIAL 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 Directory module to find actively traded commodities issued by global exchanges.
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