Correlation Between TRANSILVANIA LEASING and Aerostar Bacau
Can any of the company-specific risk be diversified away by investing in both TRANSILVANIA LEASING and Aerostar Bacau 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 TRANSILVANIA LEASING and Aerostar Bacau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRANSILVANIA LEASING SI and Aerostar Bacau, you can compare the effects of market volatilities on TRANSILVANIA LEASING and Aerostar Bacau 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 TRANSILVANIA LEASING with a short position of Aerostar Bacau. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRANSILVANIA LEASING and Aerostar Bacau.
Diversification Opportunities for TRANSILVANIA LEASING and Aerostar Bacau
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TRANSILVANIA and Aerostar is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding TRANSILVANIA LEASING SI and Aerostar Bacau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerostar Bacau and TRANSILVANIA LEASING 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 TRANSILVANIA LEASING SI are associated (or correlated) with Aerostar Bacau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerostar Bacau has no effect on the direction of TRANSILVANIA LEASING i.e., TRANSILVANIA LEASING and Aerostar Bacau go up and down completely randomly.
Pair Corralation between TRANSILVANIA LEASING and Aerostar Bacau
Assuming the 90 days trading horizon TRANSILVANIA LEASING SI is expected to generate 2.07 times more return on investment than Aerostar Bacau. However, TRANSILVANIA LEASING is 2.07 times more volatile than Aerostar Bacau. It trades about 0.04 of its potential returns per unit of risk. Aerostar Bacau is currently generating about 0.01 per unit of risk. If you would invest 7.04 in TRANSILVANIA LEASING SI on September 2, 2024 and sell it today you would earn a total of 1.71 from holding TRANSILVANIA LEASING SI or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRANSILVANIA LEASING SI vs. Aerostar Bacau
Performance |
| Timeline |
| TRANSILVANIA LEASING |
| Aerostar Bacau |
TRANSILVANIA LEASING and Aerostar Bacau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRANSILVANIA LEASING and Aerostar Bacau
The main advantage of trading using opposite TRANSILVANIA LEASING and Aerostar Bacau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRANSILVANIA LEASING position performs unexpectedly, Aerostar Bacau 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 Aerostar Bacau will offset losses from the drop in Aerostar Bacau's long position.| TRANSILVANIA LEASING vs. Remarul 16 Februarie | TRANSILVANIA LEASING vs. Turism Felix B | TRANSILVANIA LEASING vs. Mecanica Sa Ce | TRANSILVANIA LEASING vs. Biofarm Bucure |
| Aerostar Bacau vs. AROBS TRANSILVANIA SOFTWARE | Aerostar Bacau vs. Erste Group Bank | Aerostar Bacau vs. Safetech Innovations SA | Aerostar Bacau vs. TRANSILVANIA INVESTMENTS ALLIANCE |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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