Correlation Between Feper SA and Societatea Nationala
Can any of the company-specific risk be diversified away by investing in both Feper SA and Societatea Nationala 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 Feper SA and Societatea Nationala into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feper SA and Societatea Nationala de, you can compare the effects of market volatilities on Feper SA and Societatea Nationala 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 Feper SA with a short position of Societatea Nationala. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feper SA and Societatea Nationala.
Diversification Opportunities for Feper SA and Societatea Nationala
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Feper and Societatea is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Feper SA and Societatea Nationala de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Societatea Nationala and Feper SA 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 Feper SA are associated (or correlated) with Societatea Nationala. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Societatea Nationala has no effect on the direction of Feper SA i.e., Feper SA and Societatea Nationala go up and down completely randomly.
Pair Corralation between Feper SA and Societatea Nationala
Assuming the 90 days trading horizon Feper SA is expected to generate 4.43 times more return on investment than Societatea Nationala. However, Feper SA is 4.43 times more volatile than Societatea Nationala de. It trades about 0.07 of its potential returns per unit of risk. Societatea Nationala de is currently generating about 0.06 per unit of risk. If you would invest 6.36 in Feper SA on August 26, 2024 and sell it today you would earn a total of 12.64 from holding Feper SA or generate 198.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feper SA vs. Societatea Nationala de
Performance |
| Timeline |
| Feper SA |
| Societatea Nationala |
Feper SA and Societatea Nationala Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feper SA and Societatea Nationala
The main advantage of trading using opposite Feper SA and Societatea Nationala positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feper SA position performs unexpectedly, Societatea Nationala 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 Societatea Nationala will offset losses from the drop in Societatea Nationala's long position.The idea behind Feper SA and Societatea Nationala de pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Societatea Nationala vs. Teraplast Bist | Societatea Nationala vs. Comvex SA | Societatea Nationala vs. IAR SA | Societatea Nationala 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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