Correlation Between AROBS TRANSILVANIA and GRUPUL INDUSTRIAL

Can any of the company-specific risk be diversified away by investing in both AROBS TRANSILVANIA and GRUPUL INDUSTRIAL 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 AROBS TRANSILVANIA and GRUPUL INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AROBS TRANSILVANIA SOFTWARE and GRUPUL INDUSTRIAL ELECTROCONTACT, you can compare the effects of market volatilities on AROBS TRANSILVANIA and GRUPUL INDUSTRIAL 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 AROBS TRANSILVANIA with a short position of GRUPUL INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AROBS TRANSILVANIA and GRUPUL INDUSTRIAL.

Diversification Opportunities for AROBS TRANSILVANIA and GRUPUL INDUSTRIAL

-0.69

Correlation Coefficient

AROBS TRANSILVANIA  GRUPUL INDUSTRIAL

Excellent diversification

The 3 months correlation between AROBS and GRUPUL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding AROBS TRANSILVANIA SOFTWARE and GRUPUL INDUSTRIAL ELECTROCONTA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPUL INDUSTRIAL and AROBS TRANSILVANIA 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 AROBS TRANSILVANIA SOFTWARE are associated (or correlated) with GRUPUL INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPUL INDUSTRIAL has no effect on the direction of AROBS TRANSILVANIA i.e., AROBS TRANSILVANIA and GRUPUL INDUSTRIAL go up and down completely randomly.

Pair Corralation between AROBS TRANSILVANIA and GRUPUL INDUSTRIAL

Assuming the 90 days trading horizon AROBS TRANSILVANIA SOFTWARE is expected to under-perform the GRUPUL INDUSTRIAL. But the stock apears to be less risky and, when comparing its historical volatility, AROBS TRANSILVANIA SOFTWARE is 3.93 times less risky than GRUPUL INDUSTRIAL. The stock trades about -0.19 of its potential returns per unit of risk. The GRUPUL INDUSTRIAL ELECTROCONTACT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4.45  in GRUPUL INDUSTRIAL ELECTROCONTACT on December 30, 2024 and sell it today you would earn a total of  0.95  from holding GRUPUL INDUSTRIAL ELECTROCONTACT or generate 21.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

AROBS TRANSILVANIA SOFTWARE  vs.  GRUPUL INDUSTRIAL ELECTROCONTA

AROBS TRANSILVANIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days AROBS TRANSILVANIA SOFTWARE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

GRUPUL INDUSTRIAL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPUL INDUSTRIAL ELECTROCONTACT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, GRUPUL INDUSTRIAL displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AROBS TRANSILVANIA and GRUPUL INDUSTRIAL

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

The idea behind AROBS TRANSILVANIA SOFTWARE and GRUPUL INDUSTRIAL ELECTROCONTACT 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.