Correlation Between Public Power and Ideal Group
Can any of the company-specific risk be diversified away by investing in both Public Power and Ideal Group 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 Public Power and Ideal Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Power and Ideal Group SA, you can compare the effects of market volatilities on Public Power and Ideal Group 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 Public Power with a short position of Ideal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Power and Ideal Group.
Diversification Opportunities for Public Power and Ideal Group
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Public and Ideal is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Public Power and Ideal Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideal Group SA and Public Power 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 Public Power are associated (or correlated) with Ideal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideal Group SA has no effect on the direction of Public Power i.e., Public Power and Ideal Group go up and down completely randomly.
Pair Corralation between Public Power and Ideal Group
Assuming the 90 days trading horizon Public Power is expected to generate 1.11 times more return on investment than Ideal Group. However, Public Power is 1.11 times more volatile than Ideal Group SA. It trades about 0.07 of its potential returns per unit of risk. Ideal Group SA is currently generating about 0.08 per unit of risk. If you would invest 655.00 in Public Power on September 1, 2024 and sell it today you would earn a total of 490.00 from holding Public Power or generate 74.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Power vs. Ideal Group SA
Performance |
| Timeline |
| Public Power |
| Ideal Group SA |
Public Power and Ideal Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Power and Ideal Group
The main advantage of trading using opposite Public Power and Ideal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Power position performs unexpectedly, Ideal Group 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 Ideal Group will offset losses from the drop in Ideal Group's long position.| Public Power vs. Mytilineos SA | Public Power vs. Greek Organization of | Public Power vs. Hellenic Telecommunications Organization | Public Power vs. Alpha Services and |
| Ideal Group vs. Hellenic Telecommunications Organization | Ideal Group vs. Terna Energy Societe | Ideal Group vs. Motor Oil Corinth | Ideal Group vs. Public Power |
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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