Correlation Between IRPC Public and Global Power
Can any of the company-specific risk be diversified away by investing in both IRPC Public and Global Power 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 IRPC Public and Global Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IRPC Public and Global Power Synergy, you can compare the effects of market volatilities on IRPC Public and Global Power 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 IRPC Public with a short position of Global Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRPC Public and Global Power.
Diversification Opportunities for IRPC Public and Global Power
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IRPC and Global is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding IRPC Public and Global Power Synergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Power Synergy and IRPC Public 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 IRPC Public are associated (or correlated) with Global Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Power Synergy has no effect on the direction of IRPC Public i.e., IRPC Public and Global Power go up and down completely randomly.
Pair Corralation between IRPC Public and Global Power
Assuming the 90 days trading horizon IRPC Public is expected to under-perform the Global Power. But the stock apears to be less risky and, when comparing its historical volatility, IRPC Public is 1.08 times less risky than Global Power. The stock trades about -0.28 of its potential returns per unit of risk. The Global Power Synergy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,225 in Global Power Synergy on September 2, 2024 and sell it today you would earn a total of 125.00 from holding Global Power Synergy or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IRPC Public vs. Global Power Synergy
Performance |
| Timeline |
| IRPC Public |
| Global Power Synergy |
IRPC Public and Global Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRPC Public and Global Power
The main advantage of trading using opposite IRPC Public and Global Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRPC Public position performs unexpectedly, Global Power 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 Global Power will offset losses from the drop in Global Power's long position.| IRPC Public vs. Sawang Export Public | IRPC Public vs. Quality Houses Hotel | IRPC Public vs. Grande Hospitality Real | IRPC Public vs. City Steel Public |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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