Correlation Between Tower Investments and Stalprodukt
Can any of the company-specific risk be diversified away by investing in both Tower Investments and Stalprodukt 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 Tower Investments and Stalprodukt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Investments SA and Stalprodukt SA, you can compare the effects of market volatilities on Tower Investments and Stalprodukt 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 Tower Investments with a short position of Stalprodukt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Investments and Stalprodukt.
Diversification Opportunities for Tower Investments and Stalprodukt
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tower and Stalprodukt is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tower Investments SA and Stalprodukt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stalprodukt SA and Tower Investments 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 Tower Investments SA are associated (or correlated) with Stalprodukt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stalprodukt SA has no effect on the direction of Tower Investments i.e., Tower Investments and Stalprodukt go up and down completely randomly.
Pair Corralation between Tower Investments and Stalprodukt
Assuming the 90 days trading horizon Tower Investments SA is expected to under-perform the Stalprodukt. In addition to that, Tower Investments is 4.74 times more volatile than Stalprodukt SA. It trades about -0.04 of its total potential returns per unit of risk. Stalprodukt SA is currently generating about 0.0 per unit of volatility. If you would invest 22,600 in Stalprodukt SA on September 2, 2024 and sell it today you would lose (300.00) from holding Stalprodukt SA or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower Investments SA vs. Stalprodukt SA
Performance |
| Timeline |
| Tower Investments |
| Stalprodukt SA |
Tower Investments and Stalprodukt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Investments and Stalprodukt
The main advantage of trading using opposite Tower Investments and Stalprodukt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Investments position performs unexpectedly, Stalprodukt 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 Stalprodukt will offset losses from the drop in Stalprodukt's long position.| Tower Investments vs. BNP Paribas Bank | Tower Investments vs. Intersport Polska SA | Tower Investments vs. Marie Brizard Wine | Tower Investments vs. Saule Technologies SA |
| Stalprodukt vs. Echo Investment SA | Stalprodukt vs. Esotiq Henderson SA | Stalprodukt vs. Asseco South Eastern | Stalprodukt vs. Vercom SA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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