Correlation Between Electroarges and Promateris
Can any of the company-specific risk be diversified away by investing in both Electroarges and Promateris 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 Electroarges and Promateris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electroarges S and Promateris SA, you can compare the effects of market volatilities on Electroarges and Promateris 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 Electroarges with a short position of Promateris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electroarges and Promateris.
Diversification Opportunities for Electroarges and Promateris
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Electroarges and Promateris is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Electroarges S and Promateris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promateris SA and Electroarges 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 Electroarges S are associated (or correlated) with Promateris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promateris SA has no effect on the direction of Electroarges i.e., Electroarges and Promateris go up and down completely randomly.
Pair Corralation between Electroarges and Promateris
Assuming the 90 days trading horizon Electroarges S is expected to under-perform the Promateris. In addition to that, Electroarges is 1.09 times more volatile than Promateris SA. It trades about -0.05 of its total potential returns per unit of risk. Promateris SA is currently generating about -0.04 per unit of volatility. If you would invest 960.00 in Promateris SA on August 29, 2024 and sell it today you would lose (295.00) from holding Promateris SA or give up 30.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.15% |
| Values | Daily Returns |
Electroarges S vs. Promateris SA
Performance |
| Timeline |
| Electroarges S |
| Promateris SA |
Electroarges and Promateris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electroarges and Promateris
The main advantage of trading using opposite Electroarges and Promateris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electroarges position performs unexpectedly, Promateris 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 Promateris will offset losses from the drop in Promateris' long position.| Electroarges vs. Teraplast Bist | Electroarges vs. Comvex SA | Electroarges vs. Feper SA | Electroarges vs. IAR SA |
| Promateris vs. TRANSILVANIA LEASING SI | Promateris vs. Evergent Investments SA | Promateris vs. AROBS TRANSILVANIA SOFTWARE | Promateris vs. IHUNT TECHNOLOGY IMPORT EXPORT |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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