Correlation Between AROBS TRANSILVANIA and Prefab Bucures

Can any of the company-specific risk be diversified away by investing in both AROBS TRANSILVANIA and Prefab Bucures 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 Prefab Bucures 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 Prefab Bucures, you can compare the effects of market volatilities on AROBS TRANSILVANIA and Prefab Bucures 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 Prefab Bucures. Check out your portfolio center. Please also check ongoing floating volatility patterns of AROBS TRANSILVANIA and Prefab Bucures.

Diversification Opportunities for AROBS TRANSILVANIA and Prefab Bucures

0.65

Correlation Coefficient

AROBS TRANSILVANIA  Prefab Bucures

Poor diversification

The 3 months correlation between AROBS and Prefab is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding AROBS TRANSILVANIA SOFTWARE and Prefab Bucures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prefab Bucures 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 Prefab Bucures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prefab Bucures has no effect on the direction of AROBS TRANSILVANIA i.e., AROBS TRANSILVANIA and Prefab Bucures go up and down completely randomly.

Pair Corralation between AROBS TRANSILVANIA and Prefab Bucures

Assuming the 90 days trading horizon AROBS TRANSILVANIA SOFTWARE is expected to under-perform the Prefab Bucures. But the stock apears to be less risky and, when comparing its historical volatility, AROBS TRANSILVANIA SOFTWARE is 1.42 times less risky than Prefab Bucures. The stock trades about -0.19 of its potential returns per unit of risk. The Prefab Bucures is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  330.00  in Prefab Bucures on December 30, 2024 and sell it today you would lose (22.00) from holding Prefab Bucures or give up 6.67% of portfolio value over 90 days.

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

AROBS TRANSILVANIA SOFTWARE  vs.  Prefab Bucures

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.

Prefab Bucures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prefab Bucures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Prefab Bucures is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AROBS TRANSILVANIA and Prefab Bucures

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

The idea behind AROBS TRANSILVANIA SOFTWARE and Prefab Bucures 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.