Correlation Between Atlantic Grupa and Institut IGH

Can any of the company-specific risk be diversified away by investing in both Atlantic Grupa and Institut IGH 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 Atlantic Grupa and Institut IGH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlantic Grupa dd and Institut IGH dd, you can compare the effects of market volatilities on Atlantic Grupa and Institut IGH 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 Atlantic Grupa with a short position of Institut IGH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Grupa and Institut IGH.

Diversification Opportunities for Atlantic Grupa and Institut IGH

0.38

Correlation Coefficient

Atlantic Grupa  Institut IGH

Weak diversification

The 3 months correlation between Atlantic and Institut is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Grupa dd and Institut IGH dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Institut IGH dd and Atlantic Grupa 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 Atlantic Grupa dd are associated (or correlated) with Institut IGH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Institut IGH dd has no effect on the direction of Atlantic Grupa i.e., Atlantic Grupa and Institut IGH go up and down completely randomly.

Pair Corralation between Atlantic Grupa and Institut IGH

Assuming the 90 days trading horizon Atlantic Grupa is expected to generate 89.11 times less return on investment than Institut IGH. But when comparing it to its historical volatility, Atlantic Grupa dd is 4.95 times less risky than Institut IGH. It trades about 0.01 of its potential returns per unit of risk. Institut IGH dd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,500  in Institut IGH dd on December 30, 2024 and sell it today you would earn a total of  500.00  from holding Institut IGH dd or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	68.97%
Values	Daily Returns

Atlantic Grupa dd  vs.  Institut IGH dd

Atlantic Grupa dd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlantic Grupa dd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Atlantic Grupa is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Institut IGH dd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Institut IGH dd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Institut IGH exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atlantic Grupa and Institut IGH

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

The idea behind Atlantic Grupa dd and Institut IGH dd 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.