Correlation Between Karelia Tobacco and Intracom Constructions
Can any of the company-specific risk be diversified away by investing in both Karelia Tobacco and Intracom Constructions 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 Karelia Tobacco and Intracom Constructions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karelia Tobacco and Intracom Constructions Societe, you can compare the effects of market volatilities on Karelia Tobacco and Intracom Constructions 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 Karelia Tobacco with a short position of Intracom Constructions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karelia Tobacco and Intracom Constructions.
Diversification Opportunities for Karelia Tobacco and Intracom Constructions
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Karelia and Intracom is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Karelia Tobacco and Intracom Constructions Societe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intracom Constructions and Karelia Tobacco 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 Karelia Tobacco are associated (or correlated) with Intracom Constructions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intracom Constructions has no effect on the direction of Karelia Tobacco i.e., Karelia Tobacco and Intracom Constructions go up and down completely randomly.
Pair Corralation between Karelia Tobacco and Intracom Constructions
Assuming the 90 days trading horizon Karelia Tobacco is expected to generate 4.99 times less return on investment than Intracom Constructions. But when comparing it to its historical volatility, Karelia Tobacco is 1.24 times less risky than Intracom Constructions. It trades about 0.04 of its potential returns per unit of risk. Intracom Constructions Societe is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 121.00 in Intracom Constructions Societe on August 25, 2024 and sell it today you would earn a total of 354.00 from holding Intracom Constructions Societe or generate 292.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Karelia Tobacco vs. Intracom Constructions Societe
Performance |
| Timeline |
| Karelia Tobacco |
| Intracom Constructions |
Karelia Tobacco and Intracom Constructions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karelia Tobacco and Intracom Constructions
The main advantage of trading using opposite Karelia Tobacco and Intracom Constructions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karelia Tobacco position performs unexpectedly, Intracom Constructions 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 Intracom Constructions will offset losses from the drop in Intracom Constructions' long position.| Karelia Tobacco vs. Greek Organization of | Karelia Tobacco vs. Jumbo SA | Karelia Tobacco vs. Mytilineos SA | Karelia Tobacco vs. Motor Oil Corinth |
| Intracom Constructions vs. Intracom Holdings SA | Intracom Constructions vs. Intralot SA Integrated | Intracom Constructions vs. Ekter SA | Intracom Constructions vs. Avax SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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