Correlation Between RELO GROUP and INPOST SA

Can any of the company-specific risk be diversified away by investing in both RELO GROUP and INPOST 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 RELO GROUP and INPOST SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RELO GROUP INC and INPOST SA EO, you can compare the effects of market volatilities on RELO GROUP and INPOST 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 RELO GROUP with a short position of INPOST SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of RELO GROUP and INPOST SA.

Diversification Opportunities for RELO GROUP and INPOST SA

0.22

Correlation Coefficient

RELO GROUP  INPOST SA

Modest diversification

The 3 months correlation between RELO and INPOST is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding RELO GROUP INC and INPOST SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INPOST SA EO and RELO GROUP 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 RELO GROUP INC are associated (or correlated) with INPOST SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INPOST SA EO has no effect on the direction of RELO GROUP i.e., RELO GROUP and INPOST SA go up and down completely randomly.

Pair Corralation between RELO GROUP and INPOST SA

Assuming the 90 days horizon RELO GROUP INC is expected to generate 2.13 times more return on investment than INPOST SA. However, RELO GROUP is 2.13 times more volatile than INPOST SA EO. It trades about -0.01 of its potential returns per unit of risk. INPOST SA EO is currently generating about -0.05 per unit of risk. If you would invest  1,220  in RELO GROUP INC on December 11, 2024 and sell it today you would lose (10.00) from holding RELO GROUP INC or give up 0.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

RELO GROUP INC  vs.  INPOST SA EO

RELO GROUP INC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in RELO GROUP INC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, RELO GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

INPOST SA EO

Risk-Adjusted Performance

Very Weak

Over the last 90 days INPOST SA EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INPOST SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with RELO GROUP and INPOST SA

The main advantage of trading using opposite RELO GROUP and INPOST SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RELO GROUP position performs unexpectedly, INPOST 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 INPOST SA will offset losses from the drop in INPOST SA's long position.

The idea behind RELO GROUP INC and INPOST SA EO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.