Correlation Between SCIENCE IN and INPOST SA

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Can any of the company-specific risk be diversified away by investing in both SCIENCE IN 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 SCIENCE IN and INPOST SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCIENCE IN SPORT and INPOST SA EO, you can compare the effects of market volatilities on SCIENCE IN 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 SCIENCE IN with a short position of INPOST SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCIENCE IN and INPOST SA.

Diversification Opportunities for SCIENCE IN and INPOST SA

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between SCIENCE and INPOST is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SCIENCE IN SPORT 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 SCIENCE IN 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 SCIENCE IN SPORT 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 SCIENCE IN i.e., SCIENCE IN and INPOST SA go up and down completely randomly.

Pair Corralation between SCIENCE IN and INPOST SA

Assuming the 90 days horizon SCIENCE IN SPORT is expected to generate 2.56 times more return on investment than INPOST SA. However, SCIENCE IN is 2.56 times more volatile than INPOST SA EO. It trades about 0.05 of its potential returns per unit of risk. INPOST SA EO is currently generating about 0.07 per unit of risk. If you would invest  14.00  in SCIENCE IN SPORT on October 23, 2024 and sell it today you would earn a total of  13.00  from holding SCIENCE IN SPORT or generate 92.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SCIENCE IN SPORT  vs.  INPOST SA EO

 Performance 
       Timeline  
SCIENCE IN SPORT 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SCIENCE IN SPORT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SCIENCE IN 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

0 of 100

 
Weak
 
Strong
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 latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SCIENCE IN and INPOST SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SCIENCE IN and INPOST SA

The main advantage of trading using opposite SCIENCE IN and INPOST SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCIENCE IN 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 SCIENCE IN SPORT 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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