Correlation Between Iofina Plc and Green Star
Can any of the company-specific risk be diversified away by investing in both Iofina Plc and Green Star 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 Iofina Plc and Green Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iofina plc and Green Star Products, you can compare the effects of market volatilities on Iofina Plc and Green Star 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 Iofina Plc with a short position of Green Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iofina Plc and Green Star.
Diversification Opportunities for Iofina Plc and Green Star
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Iofina and Green is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Iofina plc and Green Star Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Star Products and Iofina Plc 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 Iofina plc are associated (or correlated) with Green Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Star Products has no effect on the direction of Iofina Plc i.e., Iofina Plc and Green Star go up and down completely randomly.
Pair Corralation between Iofina Plc and Green Star
Assuming the 90 days horizon Iofina Plc is expected to generate 19.02 times less return on investment than Green Star. But when comparing it to its historical volatility, Iofina plc is 4.27 times less risky than Green Star. It trades about 0.01 of its potential returns per unit of risk. Green Star Products is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.13 in Green Star Products on August 26, 2024 and sell it today you would lose (0.06) from holding Green Star Products or give up 46.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iofina plc vs. Green Star Products
Performance |
| Timeline |
| Iofina plc |
| Green Star Products |
Iofina Plc and Green Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iofina Plc and Green Star
The main advantage of trading using opposite Iofina Plc and Green Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iofina Plc position performs unexpectedly, Green Star 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 Green Star will offset losses from the drop in Green Star's long position.| Iofina Plc vs. First Graphene | Iofina Plc vs. HUMANA INC | Iofina Plc vs. Aquagold International | Iofina Plc vs. Barloworld Ltd ADR |
| Green Star vs. First Graphene | Green Star vs. HUMANA INC | Green Star vs. Aquagold International | Green Star vs. Barloworld Ltd ADR |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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