Correlation Between Bank Millennium and Igoria Trade
Can any of the company-specific risk be diversified away by investing in both Bank Millennium and Igoria Trade 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 Bank Millennium and Igoria Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Millennium SA and Igoria Trade SA, you can compare the effects of market volatilities on Bank Millennium and Igoria Trade 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 Bank Millennium with a short position of Igoria Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Millennium and Igoria Trade.
Diversification Opportunities for Bank Millennium and Igoria Trade
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Igoria is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bank Millennium SA and Igoria Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Igoria Trade SA and Bank Millennium 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 Bank Millennium SA are associated (or correlated) with Igoria Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Igoria Trade SA has no effect on the direction of Bank Millennium i.e., Bank Millennium and Igoria Trade go up and down completely randomly.
Pair Corralation between Bank Millennium and Igoria Trade
Assuming the 90 days trading horizon Bank Millennium is expected to generate 1.64 times less return on investment than Igoria Trade. But when comparing it to its historical volatility, Bank Millennium SA is 3.24 times less risky than Igoria Trade. It trades about 0.06 of its potential returns per unit of risk. Igoria Trade SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Igoria Trade SA on August 28, 2024 and sell it today you would lose (1.00) from holding Igoria Trade SA or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.15% |
| Values | Daily Returns |
Bank Millennium SA vs. Igoria Trade SA
Performance |
| Timeline |
| Bank Millennium SA |
| Igoria Trade SA |
Bank Millennium and Igoria Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Millennium and Igoria Trade
The main advantage of trading using opposite Bank Millennium and Igoria Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Millennium position performs unexpectedly, Igoria Trade 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 Igoria Trade will offset losses from the drop in Igoria Trade's long position.The idea behind Bank Millennium SA and Igoria Trade SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Igoria Trade vs. Asseco Business Solutions | Igoria Trade vs. Detalion Games SA | Igoria Trade vs. Asseco South Eastern | Igoria Trade vs. Movie Games 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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