Correlation Between Farmaceutica and IHUNT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Farmaceutica and IHUNT TECHNOLOGY 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 Farmaceutica and IHUNT TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmaceutica R and IHUNT TECHNOLOGY IMPORT EXPORT, you can compare the effects of market volatilities on Farmaceutica and IHUNT TECHNOLOGY 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 Farmaceutica with a short position of IHUNT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmaceutica and IHUNT TECHNOLOGY.
Diversification Opportunities for Farmaceutica and IHUNT TECHNOLOGY
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Farmaceutica and IHUNT is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Farmaceutica R and IHUNT TECHNOLOGY IMPORT EXPORT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHUNT TECHNOLOGY IMPORT and Farmaceutica 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 Farmaceutica R are associated (or correlated) with IHUNT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHUNT TECHNOLOGY IMPORT has no effect on the direction of Farmaceutica i.e., Farmaceutica and IHUNT TECHNOLOGY go up and down completely randomly.
Pair Corralation between Farmaceutica and IHUNT TECHNOLOGY
Assuming the 90 days trading horizon Farmaceutica R is expected to generate 0.64 times more return on investment than IHUNT TECHNOLOGY. However, Farmaceutica R is 1.56 times less risky than IHUNT TECHNOLOGY. It trades about -0.09 of its potential returns per unit of risk. IHUNT TECHNOLOGY IMPORT EXPORT is currently generating about -0.12 per unit of risk. If you would invest 71.00 in Farmaceutica R on September 12, 2024 and sell it today you would lose (4.00) from holding Farmaceutica R or give up 5.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farmaceutica R vs. IHUNT TECHNOLOGY IMPORT EXPORT
Performance |
| Timeline |
| Farmaceutica R |
| IHUNT TECHNOLOGY IMPORT |
Farmaceutica and IHUNT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmaceutica and IHUNT TECHNOLOGY
The main advantage of trading using opposite Farmaceutica and IHUNT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmaceutica position performs unexpectedly, IHUNT TECHNOLOGY 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 IHUNT TECHNOLOGY will offset losses from the drop in IHUNT TECHNOLOGY's long position.| Farmaceutica vs. IHUNT TECHNOLOGY IMPORT EXPORT | Farmaceutica vs. Biofarm Bucure | Farmaceutica vs. TRANSILVANIA LEASING SI | Farmaceutica vs. TRANSILVANIA INVESTMENTS ALLIANCE |
| IHUNT TECHNOLOGY vs. TRANSILVANIA INVESTMENTS ALLIANCE | IHUNT TECHNOLOGY vs. Remarul 16 Februarie | IHUNT TECHNOLOGY vs. TRANSILVANIA LEASING SI | IHUNT TECHNOLOGY vs. Biofarm Bucure |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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