Correlation Between Electroarges and Remarul 16
Can any of the company-specific risk be diversified away by investing in both Electroarges and Remarul 16 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 Remarul 16 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electroarges S and Remarul 16 Februarie, you can compare the effects of market volatilities on Electroarges and Remarul 16 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 Remarul 16. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electroarges and Remarul 16.
Diversification Opportunities for Electroarges and Remarul 16
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electroarges and Remarul is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Electroarges S and Remarul 16 Februarie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remarul 16 Februarie 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 Remarul 16. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remarul 16 Februarie has no effect on the direction of Electroarges i.e., Electroarges and Remarul 16 go up and down completely randomly.
Pair Corralation between Electroarges and Remarul 16
Assuming the 90 days trading horizon Electroarges S is expected to under-perform the Remarul 16. But the stock apears to be less risky and, when comparing its historical volatility, Electroarges S is 1.06 times less risky than Remarul 16. The stock trades about -0.03 of its potential returns per unit of risk. The Remarul 16 Februarie is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,980 in Remarul 16 Februarie on August 26, 2024 and sell it today you would earn a total of 740.00 from holding Remarul 16 Februarie or generate 37.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.53% |
| Values | Daily Returns |
Electroarges S vs. Remarul 16 Februarie
Performance |
| Timeline |
| Electroarges S |
| Remarul 16 Februarie |
Electroarges and Remarul 16 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electroarges and Remarul 16
The main advantage of trading using opposite Electroarges and Remarul 16 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electroarges position performs unexpectedly, Remarul 16 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 Remarul 16 will offset losses from the drop in Remarul 16's long position.| Electroarges vs. Teraplast Bist | Electroarges vs. Comvex SA | Electroarges vs. IAR SA | Electroarges vs. Cemacon Zalau |
| Remarul 16 vs. Teraplast Bist | Remarul 16 vs. Comvex SA | Remarul 16 vs. IAR SA | Remarul 16 vs. Cemacon Zalau |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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