Correlation Between Inrom Construction and Internet Gold
Can any of the company-specific risk be diversified away by investing in both Inrom Construction and Internet Gold 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 Inrom Construction and Internet Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inrom Construction Industries and Internet Gold Golden, you can compare the effects of market volatilities on Inrom Construction and Internet Gold 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 Inrom Construction with a short position of Internet Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inrom Construction and Internet Gold.
Diversification Opportunities for Inrom Construction and Internet Gold
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inrom and Internet is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Inrom Construction Industries and Internet Gold Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Gold Golden and Inrom Construction 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 Inrom Construction Industries are associated (or correlated) with Internet Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Gold Golden has no effect on the direction of Inrom Construction i.e., Inrom Construction and Internet Gold go up and down completely randomly.
Pair Corralation between Inrom Construction and Internet Gold
Assuming the 90 days trading horizon Inrom Construction Industries is expected to generate 0.27 times more return on investment than Internet Gold. However, Inrom Construction Industries is 3.69 times less risky than Internet Gold. It trades about 0.44 of its potential returns per unit of risk. Internet Gold Golden is currently generating about -0.08 per unit of risk. If you would invest 130,765 in Inrom Construction Industries on August 31, 2024 and sell it today you would earn a total of 26,035 from holding Inrom Construction Industries or generate 19.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inrom Construction Industries vs. Internet Gold Golden
Performance |
| Timeline |
| Inrom Construction |
| Internet Gold Golden |
Inrom Construction and Internet Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inrom Construction and Internet Gold
The main advantage of trading using opposite Inrom Construction and Internet Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inrom Construction position performs unexpectedly, Internet Gold 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 Internet Gold will offset losses from the drop in Internet Gold's long position.| Inrom Construction vs. Arad | Inrom Construction vs. Alony Hetz Properties | Inrom Construction vs. Danel | Inrom Construction vs. Airport City |
| Internet Gold vs. RSL Electronics | Internet Gold vs. Imed Infinity Medical Limited | Internet Gold vs. Hiron Trade Investments Industrial | Internet Gold vs. Inrom Construction Industries |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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