Correlation Between ALEFARM BREWING and Greek Organization

Can any of the company-specific risk be diversified away by investing in both ALEFARM BREWING and Greek Organization 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 ALEFARM BREWING and Greek Organization into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ALEFARM BREWING DK 05 and Greek Organization of, you can compare the effects of market volatilities on ALEFARM BREWING and Greek Organization 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 ALEFARM BREWING with a short position of Greek Organization. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALEFARM BREWING and Greek Organization.

Diversification Opportunities for ALEFARM BREWING and Greek Organization

0.89

Correlation Coefficient

ALEFARM BREWING  Greek Organization

Very poor diversification

The 3 months correlation between ALEFARM and Greek is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ALEFARM BREWING DK 05 and Greek Organization of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greek Organization and ALEFARM BREWING 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 ALEFARM BREWING DK 05 are associated (or correlated) with Greek Organization. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greek Organization has no effect on the direction of ALEFARM BREWING i.e., ALEFARM BREWING and Greek Organization go up and down completely randomly.

Pair Corralation between ALEFARM BREWING and Greek Organization

Assuming the 90 days horizon ALEFARM BREWING DK 05 is expected to generate 2.31 times more return on investment than Greek Organization. However, ALEFARM BREWING is 2.31 times more volatile than Greek Organization of. It trades about 0.14 of its potential returns per unit of risk. Greek Organization of is currently generating about 0.18 per unit of risk. If you would invest  17.00  in ALEFARM BREWING DK 05 on December 26, 2024 and sell it today you would earn a total of  5.00  from holding ALEFARM BREWING DK 05 or generate 29.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

ALEFARM BREWING DK 05  vs.  Greek Organization of

ALEFARM BREWING DK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ALEFARM BREWING DK 05 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ALEFARM BREWING reported solid returns over the last few months and may actually be approaching a breakup point.

Greek Organization

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greek Organization of are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Greek Organization reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALEFARM BREWING and Greek Organization

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

The idea behind ALEFARM BREWING DK 05 and Greek Organization of 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.