Correlation Between IHUNT TECHNOLOGY and Romcab SA
Can any of the company-specific risk be diversified away by investing in both IHUNT TECHNOLOGY and Romcab 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 IHUNT TECHNOLOGY and Romcab SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IHUNT TECHNOLOGY IMPORT EXPORT and Romcab SA, you can compare the effects of market volatilities on IHUNT TECHNOLOGY and Romcab 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 IHUNT TECHNOLOGY with a short position of Romcab SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHUNT TECHNOLOGY and Romcab SA.
Diversification Opportunities for IHUNT TECHNOLOGY and Romcab SA
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IHUNT and Romcab is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding IHUNT TECHNOLOGY IMPORT EXPORT and Romcab SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Romcab SA and IHUNT TECHNOLOGY 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 IHUNT TECHNOLOGY IMPORT EXPORT are associated (or correlated) with Romcab SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Romcab SA has no effect on the direction of IHUNT TECHNOLOGY i.e., IHUNT TECHNOLOGY and Romcab SA go up and down completely randomly.
Pair Corralation between IHUNT TECHNOLOGY and Romcab SA
Assuming the 90 days trading horizon IHUNT TECHNOLOGY IMPORT EXPORT is expected to generate 0.56 times more return on investment than Romcab SA. However, IHUNT TECHNOLOGY IMPORT EXPORT is 1.79 times less risky than Romcab SA. It trades about -0.15 of its potential returns per unit of risk. Romcab SA is currently generating about -0.26 per unit of risk. If you would invest 44.00 in IHUNT TECHNOLOGY IMPORT EXPORT on September 1, 2024 and sell it today you would lose (4.00) from holding IHUNT TECHNOLOGY IMPORT EXPORT or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
IHUNT TECHNOLOGY IMPORT EXPORT vs. Romcab SA
Performance |
| Timeline |
| IHUNT TECHNOLOGY IMPORT |
| Romcab SA |
IHUNT TECHNOLOGY and Romcab SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHUNT TECHNOLOGY and Romcab SA
The main advantage of trading using opposite IHUNT TECHNOLOGY and Romcab SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHUNT TECHNOLOGY position performs unexpectedly, Romcab 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 Romcab SA will offset losses from the drop in Romcab SA's long position.| IHUNT TECHNOLOGY vs. Remarul 16 Februarie | IHUNT TECHNOLOGY vs. Turism Felix B | IHUNT TECHNOLOGY vs. TRANSILVANIA LEASING SI | IHUNT TECHNOLOGY vs. Mecanica Sa Ce |
| Romcab SA vs. AROBS TRANSILVANIA SOFTWARE | Romcab SA vs. TRANSILVANIA LEASING SI | Romcab SA vs. Evergent Investments SA | Romcab SA vs. Compania Hoteliera InterContinental |
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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