Correlation Between HM Inwest and Vercom SA
Can any of the company-specific risk be diversified away by investing in both HM Inwest and Vercom SA 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 HM Inwest and Vercom SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HM Inwest SA and Vercom SA, you can compare the effects of market volatilities on HM Inwest and Vercom SA 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 HM Inwest with a short position of Vercom SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of HM Inwest and Vercom SA.
Diversification Opportunities for HM Inwest and Vercom SA
Average diversification
The 3 months correlation between HMI and Vercom is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding HM Inwest SA and Vercom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vercom SA and HM Inwest 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 HM Inwest SA are associated (or correlated) with Vercom SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vercom SA has no effect on the direction of HM Inwest i.e., HM Inwest and Vercom SA go up and down completely randomly.
Pair Corralation between HM Inwest and Vercom SA
Assuming the 90 days trading horizon HM Inwest is expected to generate 15.04 times less return on investment than Vercom SA. But when comparing it to its historical volatility, HM Inwest SA is 5.5 times less risky than Vercom SA. It trades about 0.03 of its potential returns per unit of risk. Vercom SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,550 in Vercom SA on September 1, 2024 and sell it today you would earn a total of 350.00 from holding Vercom SA or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HM Inwest SA vs. Vercom SA
Performance |
| Timeline |
| HM Inwest SA |
| Vercom SA |
HM Inwest and Vercom SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HM Inwest and Vercom SA
The main advantage of trading using opposite HM Inwest and Vercom SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HM Inwest position performs unexpectedly, Vercom SA 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 Vercom SA will offset losses from the drop in Vercom SA's long position.| HM Inwest vs. Mercator Medical SA | HM Inwest vs. Gaming Factory SA | HM Inwest vs. Intersport Polska SA | HM Inwest vs. CI Games SA |
| Vercom SA vs. Banco Santander SA | Vercom SA vs. UniCredit SpA | Vercom SA vs. CEZ as | Vercom SA vs. Polski Koncern Naftowy |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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