Correlation Between Expat Serbia and Expat Croatia
Can any of the company-specific risk be diversified away by investing in both Expat Serbia and Expat Croatia 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 Expat Serbia and Expat Croatia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expat Serbia Belex15 and Expat Croatia Crobex, you can compare the effects of market volatilities on Expat Serbia and Expat Croatia 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 Expat Serbia with a short position of Expat Croatia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expat Serbia and Expat Croatia.
Diversification Opportunities for Expat Serbia and Expat Croatia
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Expat and Expat is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Expat Serbia Belex15 and Expat Croatia Crobex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Croatia Crobex and Expat Serbia 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 Expat Serbia Belex15 are associated (or correlated) with Expat Croatia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Croatia Crobex has no effect on the direction of Expat Serbia i.e., Expat Serbia and Expat Croatia go up and down completely randomly.
Pair Corralation between Expat Serbia and Expat Croatia
Assuming the 90 days trading horizon Expat Serbia is expected to generate 10.05 times less return on investment than Expat Croatia. But when comparing it to its historical volatility, Expat Serbia Belex15 is 1.11 times less risky than Expat Croatia. It trades about 0.01 of its potential returns per unit of risk. Expat Croatia Crobex is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 65.00 in Expat Croatia Crobex on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Expat Croatia Crobex or generate 55.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expat Serbia Belex15 vs. Expat Croatia Crobex
Performance |
| Timeline |
| Expat Serbia Belex15 |
| Expat Croatia Crobex |
Expat Serbia and Expat Croatia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expat Serbia and Expat Croatia
The main advantage of trading using opposite Expat Serbia and Expat Croatia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expat Serbia position performs unexpectedly, Expat Croatia 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 Expat Croatia will offset losses from the drop in Expat Croatia's long position.| Expat Serbia vs. Expat Czech PX | Expat Serbia vs. Expat Croatia Crobex | Expat Serbia vs. Expat Poland WIG20 | Expat Serbia vs. Expat Slovenia SBI |
| Expat Croatia vs. Expat Czech PX | Expat Croatia vs. Expat Serbia Belex15 | Expat Croatia vs. Expat Poland WIG20 | Expat Croatia vs. Expat Slovenia SBI |
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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