Correlation Between Photon Energy and Toma As
Can any of the company-specific risk be diversified away by investing in both Photon Energy and Toma As 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 Photon Energy and Toma As into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photon Energy NV and Toma as, you can compare the effects of market volatilities on Photon Energy and Toma As 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 Photon Energy with a short position of Toma As. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photon Energy and Toma As.
Diversification Opportunities for Photon Energy and Toma As
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Photon and Toma is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Photon Energy NV and Toma as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toma as and Photon Energy 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 Photon Energy NV are associated (or correlated) with Toma As. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toma as has no effect on the direction of Photon Energy i.e., Photon Energy and Toma As go up and down completely randomly.
Pair Corralation between Photon Energy and Toma As
Assuming the 90 days trading horizon Photon Energy NV is expected to under-perform the Toma As. In addition to that, Photon Energy is 4.21 times more volatile than Toma as. It trades about -0.22 of its total potential returns per unit of risk. Toma as is currently generating about 0.17 per unit of volatility. If you would invest 134,000 in Toma as on September 1, 2024 and sell it today you would earn a total of 4,000 from holding Toma as or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Photon Energy NV vs. Toma as
Performance |
| Timeline |
| Photon Energy NV |
| Toma as |
Photon Energy and Toma As Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photon Energy and Toma As
The main advantage of trading using opposite Photon Energy and Toma As positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photon Energy position performs unexpectedly, Toma As 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 Toma As will offset losses from the drop in Toma As' long position.| Photon Energy vs. Vienna Insurance Group | Photon Energy vs. UNIQA Insurance Group | Photon Energy vs. Moneta Money Bank |
| Toma As vs. Vienna Insurance Group | Toma As vs. JT ARCH INVESTMENTS | Toma As vs. Erste Group Bank | Toma As vs. Raiffeisen Bank International |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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