Correlation Between NGG and Izolacja Jarocin
Can any of the company-specific risk be diversified away by investing in both NGG and Izolacja Jarocin 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 NGG and Izolacja Jarocin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGG and Izolacja Jarocin SA, you can compare the effects of market volatilities on NGG and Izolacja Jarocin 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 NGG with a short position of Izolacja Jarocin. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGG and Izolacja Jarocin.
Diversification Opportunities for NGG and Izolacja Jarocin
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NGG and Izolacja is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NGG and Izolacja Jarocin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Izolacja Jarocin and NGG 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 NGG are associated (or correlated) with Izolacja Jarocin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Izolacja Jarocin has no effect on the direction of NGG i.e., NGG and Izolacja Jarocin go up and down completely randomly.
Pair Corralation between NGG and Izolacja Jarocin
Assuming the 90 days trading horizon NGG is expected to generate 1.92 times more return on investment than Izolacja Jarocin. However, NGG is 1.92 times more volatile than Izolacja Jarocin SA. It trades about 0.06 of its potential returns per unit of risk. Izolacja Jarocin SA is currently generating about -0.06 per unit of risk. If you would invest 3.26 in NGG on September 2, 2024 and sell it today you would earn a total of 0.12 from holding NGG or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
NGG vs. Izolacja Jarocin SA
Performance |
| Timeline |
| NGG |
| Izolacja Jarocin |
NGG and Izolacja Jarocin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NGG and Izolacja Jarocin
The main advantage of trading using opposite NGG and Izolacja Jarocin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGG position performs unexpectedly, Izolacja Jarocin 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 Izolacja Jarocin will offset losses from the drop in Izolacja Jarocin's long position.| NGG vs. Asseco Business Solutions | NGG vs. Detalion Games SA | NGG vs. Asseco South Eastern | NGG vs. CFI Holding SA |
| Izolacja Jarocin vs. Banco Santander SA | Izolacja Jarocin vs. UniCredit SpA | Izolacja Jarocin vs. CEZ as | Izolacja Jarocin vs. Polski Koncern Naftowy |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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