Correlation Between IAR SA and Atelierele CFR
Can any of the company-specific risk be diversified away by investing in both IAR SA and Atelierele CFR 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 IAR SA and Atelierele CFR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAR SA and Atelierele CFR Grivita, you can compare the effects of market volatilities on IAR SA and Atelierele CFR 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 IAR SA with a short position of Atelierele CFR. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR SA and Atelierele CFR.
Diversification Opportunities for IAR SA and Atelierele CFR
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between IAR and Atelierele is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding IAR SA and Atelierele CFR Grivita in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atelierele CFR Grivita and IAR 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 IAR SA are associated (or correlated) with Atelierele CFR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atelierele CFR Grivita has no effect on the direction of IAR SA i.e., IAR SA and Atelierele CFR go up and down completely randomly.
Pair Corralation between IAR SA and Atelierele CFR
Assuming the 90 days trading horizon IAR SA is expected to generate 0.55 times more return on investment than Atelierele CFR. However, IAR SA is 1.81 times less risky than Atelierele CFR. It trades about -0.02 of its potential returns per unit of risk. Atelierele CFR Grivita is currently generating about -0.02 per unit of risk. If you would invest 1,335 in IAR SA on September 1, 2024 and sell it today you would lose (55.00) from holding IAR SA or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
IAR SA vs. Atelierele CFR Grivita
Performance |
| Timeline |
| IAR SA |
| Atelierele CFR Grivita |
IAR SA and Atelierele CFR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR SA and Atelierele CFR
The main advantage of trading using opposite IAR SA and Atelierele CFR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR SA position performs unexpectedly, Atelierele CFR 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 Atelierele CFR will offset losses from the drop in Atelierele CFR's long position.| IAR SA vs. AROBS TRANSILVANIA SOFTWARE | IAR SA vs. TRANSILVANIA INVESTMENTS ALLIANCE | IAR SA vs. Digi Communications NV | IAR SA vs. Erste Group Bank |
| Atelierele CFR vs. TRANSILVANIA INVESTMENTS ALLIANCE | Atelierele CFR vs. Erste Group Bank | Atelierele CFR vs. Infinity Capital Investments | Atelierele CFR vs. Safetech Innovations SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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