Correlation Between GRUPUL INDUSTRIAL and TTS
Can any of the company-specific risk be diversified away by investing in both GRUPUL INDUSTRIAL and TTS 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 TTS 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 TTS, you can compare the effects of market volatilities on GRUPUL INDUSTRIAL and TTS 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 TTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPUL INDUSTRIAL and TTS.
Diversification Opportunities for GRUPUL INDUSTRIAL and TTS
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between GRUPUL and TTS is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding GRUPUL INDUSTRIAL ELECTROCONTA and TTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTS 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 TTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTS has no effect on the direction of GRUPUL INDUSTRIAL i.e., GRUPUL INDUSTRIAL and TTS go up and down completely randomly.
Pair Corralation between GRUPUL INDUSTRIAL and TTS
Assuming the 90 days trading horizon GRUPUL INDUSTRIAL ELECTROCONTACT is expected to generate 0.76 times more return on investment than TTS. However, GRUPUL INDUSTRIAL ELECTROCONTACT is 1.32 times less risky than TTS. It trades about 0.23 of its potential returns per unit of risk. TTS is currently generating about -0.44 per unit of risk. If you would invest 4.00 in GRUPUL INDUSTRIAL ELECTROCONTACT on August 24, 2024 and sell it today you would earn a total of 0.50 from holding GRUPUL INDUSTRIAL ELECTROCONTACT or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRUPUL INDUSTRIAL ELECTROCONTA vs. TTS
Performance |
| Timeline |
| GRUPUL INDUSTRIAL |
| TTS |
GRUPUL INDUSTRIAL and TTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRUPUL INDUSTRIAL and TTS
The main advantage of trading using opposite GRUPUL INDUSTRIAL and TTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPUL INDUSTRIAL position performs unexpectedly, TTS 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 TTS will offset losses from the drop in TTS'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 |
| TTS vs. TRANSILVANIA INVESTMENTS ALLIANCE | TTS vs. Remarul 16 Februarie | TTS vs. TRANSILVANIA LEASING SI | TTS vs. Biofarm Bucure |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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