Correlation Between Inbar Group and Palram
Can any of the company-specific risk be diversified away by investing in both Inbar Group and Palram 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 Inbar Group and Palram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inbar Group Finance and Palram, you can compare the effects of market volatilities on Inbar Group and Palram 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 Inbar Group with a short position of Palram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inbar Group and Palram.
Diversification Opportunities for Inbar Group and Palram
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inbar and Palram is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Inbar Group Finance and Palram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palram and Inbar Group 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 Inbar Group Finance are associated (or correlated) with Palram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palram has no effect on the direction of Inbar Group i.e., Inbar Group and Palram go up and down completely randomly.
Pair Corralation between Inbar Group and Palram
Assuming the 90 days trading horizon Inbar Group is expected to generate 1.33 times less return on investment than Palram. In addition to that, Inbar Group is 2.89 times more volatile than Palram. It trades about 0.06 of its total potential returns per unit of risk. Palram is currently generating about 0.22 per unit of volatility. If you would invest 480,926 in Palram on August 25, 2024 and sell it today you would earn a total of 234,074 from holding Palram or generate 48.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inbar Group Finance vs. Palram
Performance |
| Timeline |
| Inbar Group Finance |
| Palram |
Inbar Group and Palram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inbar Group and Palram
The main advantage of trading using opposite Inbar Group and Palram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inbar Group position performs unexpectedly, Palram 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 Palram will offset losses from the drop in Palram's long position.| Inbar Group vs. Multi Retail Group | Inbar Group vs. Rapac Communication Infrastructure | Inbar Group vs. B Communications | Inbar Group vs. Suny Cellular Communication |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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