Correlation Between Netz Hotels and Libra Insurance
Can any of the company-specific risk be diversified away by investing in both Netz Hotels and Libra Insurance 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 Netz Hotels and Libra Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netz Hotels and Libra Insurance, you can compare the effects of market volatilities on Netz Hotels and Libra Insurance 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 Netz Hotels with a short position of Libra Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netz Hotels and Libra Insurance.
Diversification Opportunities for Netz Hotels and Libra Insurance
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Netz and Libra is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Netz Hotels and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance and Netz Hotels 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 Netz Hotels are associated (or correlated) with Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of Netz Hotels i.e., Netz Hotels and Libra Insurance go up and down completely randomly.
Pair Corralation between Netz Hotels and Libra Insurance
Assuming the 90 days trading horizon Netz Hotels is expected to generate 1.37 times less return on investment than Libra Insurance. In addition to that, Netz Hotels is 1.0 times more volatile than Libra Insurance. It trades about 0.26 of its total potential returns per unit of risk. Libra Insurance is currently generating about 0.36 per unit of volatility. If you would invest 72,004 in Libra Insurance on September 1, 2024 and sell it today you would earn a total of 15,286 from holding Libra Insurance or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netz Hotels vs. Libra Insurance
Performance |
| Timeline |
| Netz Hotels |
| Libra Insurance |
Netz Hotels and Libra Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netz Hotels and Libra Insurance
The main advantage of trading using opposite Netz Hotels and Libra Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netz Hotels position performs unexpectedly, Libra Insurance 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 Libra Insurance will offset losses from the drop in Libra Insurance's long position.| Netz Hotels vs. Direct Capital Investments | Netz Hotels vs. Brainsway | Netz Hotels vs. Mivne Real Estate | Netz Hotels vs. Photomyne |
| Libra Insurance vs. Brainsway | Libra Insurance vs. Mivne Real Estate | Libra Insurance vs. Photomyne | Libra Insurance vs. Israel Land Development |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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