Correlation Between INDIKA ENERGY and INNOVATEC SPA
Can any of the company-specific risk be diversified away by investing in both INDIKA ENERGY and INNOVATEC SPA 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 INDIKA ENERGY and INNOVATEC SPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDIKA ENERGY and INNOVATEC SPA, you can compare the effects of market volatilities on INDIKA ENERGY and INNOVATEC SPA 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 INDIKA ENERGY with a short position of INNOVATEC SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDIKA ENERGY and INNOVATEC SPA.
Diversification Opportunities for INDIKA ENERGY and INNOVATEC SPA
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INDIKA and INNOVATEC is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding INDIKA ENERGY and INNOVATEC SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOVATEC SPA and INDIKA ENERGY 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 INDIKA ENERGY are associated (or correlated) with INNOVATEC SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOVATEC SPA has no effect on the direction of INDIKA ENERGY i.e., INDIKA ENERGY and INNOVATEC SPA go up and down completely randomly.
Pair Corralation between INDIKA ENERGY and INNOVATEC SPA
Assuming the 90 days trading horizon INDIKA ENERGY is expected to generate 0.2 times more return on investment than INNOVATEC SPA. However, INDIKA ENERGY is 5.02 times less risky than INNOVATEC SPA. It trades about 0.16 of its potential returns per unit of risk. INNOVATEC SPA is currently generating about -0.2 per unit of risk. If you would invest 7.80 in INDIKA ENERGY on November 2, 2024 and sell it today you would earn a total of 1.05 from holding INDIKA ENERGY or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
INDIKA ENERGY vs. INNOVATEC SPA
Performance |
| Timeline |
| INDIKA ENERGY |
| INNOVATEC SPA |
INDIKA ENERGY and INNOVATEC SPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDIKA ENERGY and INNOVATEC SPA
The main advantage of trading using opposite INDIKA ENERGY and INNOVATEC SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDIKA ENERGY position performs unexpectedly, INNOVATEC SPA 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 INNOVATEC SPA will offset losses from the drop in INNOVATEC SPA's long position.| INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc |
| INNOVATEC SPA vs. Duke Energy | INNOVATEC SPA vs. WEC Energy Group | INNOVATEC SPA vs. ENDESA ADR 12 | INNOVATEC SPA vs. CK Infrastructure Holdings |
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.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |