Correlation Between Promateris and TRANSILVANIA LEASING
Can any of the company-specific risk be diversified away by investing in both Promateris and TRANSILVANIA LEASING 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 Promateris and TRANSILVANIA LEASING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Promateris SA and TRANSILVANIA LEASING SI, you can compare the effects of market volatilities on Promateris and TRANSILVANIA LEASING 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 Promateris with a short position of TRANSILVANIA LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promateris and TRANSILVANIA LEASING.
Diversification Opportunities for Promateris and TRANSILVANIA LEASING
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Promateris and TRANSILVANIA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Promateris SA and TRANSILVANIA LEASING SI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA LEASING and Promateris 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 Promateris SA are associated (or correlated) with TRANSILVANIA LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA LEASING has no effect on the direction of Promateris i.e., Promateris and TRANSILVANIA LEASING go up and down completely randomly.
Pair Corralation between Promateris and TRANSILVANIA LEASING
Assuming the 90 days trading horizon Promateris is expected to generate 1.44 times less return on investment than TRANSILVANIA LEASING. In addition to that, Promateris is 1.21 times more volatile than TRANSILVANIA LEASING SI. It trades about 0.01 of its total potential returns per unit of risk. TRANSILVANIA LEASING SI is currently generating about 0.02 per unit of volatility. If you would invest 8.21 in TRANSILVANIA LEASING SI on August 25, 2024 and sell it today you would earn a total of 0.09 from holding TRANSILVANIA LEASING SI or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Promateris SA vs. TRANSILVANIA LEASING SI
Performance |
| Timeline |
| Promateris SA |
| TRANSILVANIA LEASING |
Promateris and TRANSILVANIA LEASING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promateris and TRANSILVANIA LEASING
The main advantage of trading using opposite Promateris and TRANSILVANIA LEASING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promateris position performs unexpectedly, TRANSILVANIA LEASING 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 TRANSILVANIA LEASING will offset losses from the drop in TRANSILVANIA LEASING's long position.| Promateris vs. Teraplast Bist | Promateris vs. Electroarges S | Promateris vs. Comvex SA | Promateris vs. IAR SA |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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