Correlation Between IM Vinaria and Romcab SA
Can any of the company-specific risk be diversified away by investing in both IM Vinaria and Romcab SA 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 IM Vinaria and Romcab SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IM Vinaria Purcari and Romcab SA, you can compare the effects of market volatilities on IM Vinaria and Romcab SA 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 IM Vinaria with a short position of Romcab SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of IM Vinaria and Romcab SA.
Diversification Opportunities for IM Vinaria and Romcab SA
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WINE and Romcab is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding IM Vinaria Purcari and Romcab SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Romcab SA and IM Vinaria 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 IM Vinaria Purcari are associated (or correlated) with Romcab SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Romcab SA has no effect on the direction of IM Vinaria i.e., IM Vinaria and Romcab SA go up and down completely randomly.
Pair Corralation between IM Vinaria and Romcab SA
Assuming the 90 days trading horizon IM Vinaria Purcari is expected to generate 0.1 times more return on investment than Romcab SA. However, IM Vinaria Purcari is 10.52 times less risky than Romcab SA. It trades about 0.18 of its potential returns per unit of risk. Romcab SA is currently generating about -0.32 per unit of risk. If you would invest 1,480 in IM Vinaria Purcari on August 29, 2024 and sell it today you would earn a total of 28.00 from holding IM Vinaria Purcari or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IM Vinaria Purcari vs. Romcab SA
Performance |
| Timeline |
| IM Vinaria Purcari |
| Romcab SA |
IM Vinaria and Romcab SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IM Vinaria and Romcab SA
The main advantage of trading using opposite IM Vinaria and Romcab SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IM Vinaria position performs unexpectedly, Romcab SA 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 Romcab SA will offset losses from the drop in Romcab SA's long position.| IM Vinaria vs. Teraplast Bist | IM Vinaria vs. Electroarges S | IM Vinaria vs. Comvex SA | IM Vinaria vs. IAR SA |
| Romcab SA vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Romcab SA vs. IHUNT TECHNOLOGY IMPORT EXPORT | Romcab SA vs. Evergent Investments SA | Romcab SA vs. AROBS TRANSILVANIA SOFTWARE |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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