Correlation Between BONAS IMPORT and TRANSILVANIA INVESTMENTS

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

By analyzing existing cross correlation between BONAS IMPORT EXPORT and TRANSILVANIA INVESTMENTS ALLIANCE, you can compare the effects of market volatilities on BONAS IMPORT and TRANSILVANIA INVESTMENTS 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 BONAS IMPORT with a short position of TRANSILVANIA INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BONAS IMPORT and TRANSILVANIA INVESTMENTS.

Diversification Opportunities for BONAS IMPORT and TRANSILVANIA INVESTMENTS

-0.08

Correlation Coefficient

BONAS IMPORT  TRANSILVANIA INVESTMENTS

Good diversification

The 3 months correlation between BONAS and TRANSILVANIA is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BONAS IMPORT EXPORT and TRANSILVANIA INVESTMENTS ALLIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA INVESTMENTS and BONAS IMPORT 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 BONAS IMPORT EXPORT are associated (or correlated) with TRANSILVANIA INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA INVESTMENTS has no effect on the direction of BONAS IMPORT i.e., BONAS IMPORT and TRANSILVANIA INVESTMENTS go up and down completely randomly.

Pair Corralation between BONAS IMPORT and TRANSILVANIA INVESTMENTS

Assuming the 90 days trading horizon BONAS IMPORT EXPORT is expected to under-perform the TRANSILVANIA INVESTMENTS. In addition to that, BONAS IMPORT is 1.71 times more volatile than TRANSILVANIA INVESTMENTS ALLIANCE. It trades about -0.02 of its total potential returns per unit of risk. TRANSILVANIA INVESTMENTS ALLIANCE is currently generating about 0.05 per unit of volatility. If you would invest  27.00  in TRANSILVANIA INVESTMENTS ALLIANCE on October 9, 2024 and sell it today you would earn a total of  10.00  from holding TRANSILVANIA INVESTMENTS ALLIANCE or generate 37.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.88%
Values	Daily Returns

BONAS IMPORT EXPORT  vs.  TRANSILVANIA INVESTMENTS ALLIA

BONAS IMPORT EXPORT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BONAS IMPORT EXPORT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

TRANSILVANIA INVESTMENTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRANSILVANIA INVESTMENTS ALLIANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, TRANSILVANIA INVESTMENTS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BONAS IMPORT and TRANSILVANIA INVESTMENTS

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

The idea behind BONAS IMPORT EXPORT and TRANSILVANIA INVESTMENTS ALLIANCE 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.