Correlation Between Interlife General and Mermeren Kombinat
Can any of the company-specific risk be diversified away by investing in both Interlife General and Mermeren Kombinat 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 Interlife General and Mermeren Kombinat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interlife General Insurance and Mermeren Kombinat AD, you can compare the effects of market volatilities on Interlife General and Mermeren Kombinat 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 Interlife General with a short position of Mermeren Kombinat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlife General and Mermeren Kombinat.
Diversification Opportunities for Interlife General and Mermeren Kombinat
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Interlife and Mermeren is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Interlife General Insurance and Mermeren Kombinat AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mermeren Kombinat and Interlife General 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 Interlife General Insurance are associated (or correlated) with Mermeren Kombinat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mermeren Kombinat has no effect on the direction of Interlife General i.e., Interlife General and Mermeren Kombinat go up and down completely randomly.
Pair Corralation between Interlife General and Mermeren Kombinat
Assuming the 90 days trading horizon Interlife General Insurance is expected to generate 0.42 times more return on investment than Mermeren Kombinat. However, Interlife General Insurance is 2.36 times less risky than Mermeren Kombinat. It trades about -0.02 of its potential returns per unit of risk. Mermeren Kombinat AD is currently generating about -0.01 per unit of risk. If you would invest 500.00 in Interlife General Insurance on November 3, 2024 and sell it today you would lose (36.00) from holding Interlife General Insurance or give up 7.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Interlife General Insurance vs. Mermeren Kombinat AD
Performance |
| Timeline |
| Interlife General |
| Mermeren Kombinat |
Interlife General and Mermeren Kombinat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interlife General and Mermeren Kombinat
The main advantage of trading using opposite Interlife General and Mermeren Kombinat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interlife General position performs unexpectedly, Mermeren Kombinat 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 Mermeren Kombinat will offset losses from the drop in Mermeren Kombinat's long position.| Interlife General vs. Admie Holding SA | Interlife General vs. Coca Cola HBC AG | Interlife General vs. Motor Oil Corinth | Interlife General vs. Athens Water Supply |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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