Correlation Between BONAS IMPORT and TRANSILVANIA LEASING

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

Diversification Opportunities for BONAS IMPORT and TRANSILVANIA LEASING

-0.57

Correlation Coefficient

BONAS IMPORT  TRANSILVANIA LEASING

Excellent diversification

The 3 months correlation between BONAS and TRANSILVANIA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BONAS IMPORT EXPORT and TRANSILVANIA LEASING SI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA LEASING 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 LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA LEASING has no effect on the direction of BONAS IMPORT i.e., BONAS IMPORT and TRANSILVANIA LEASING go up and down completely randomly.

Pair Corralation between BONAS IMPORT and TRANSILVANIA LEASING

Assuming the 90 days trading horizon BONAS IMPORT EXPORT is expected to under-perform the TRANSILVANIA LEASING. In addition to that, BONAS IMPORT is 1.94 times more volatile than TRANSILVANIA LEASING SI. It trades about -0.01 of its total potential returns per unit of risk. TRANSILVANIA LEASING SI is currently generating about 0.11 per unit of volatility. If you would invest  8.55  in TRANSILVANIA LEASING SI on December 25, 2024 and sell it today you would earn a total of  1.45  from holding TRANSILVANIA LEASING SI or generate 16.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	73.21%
Values	Daily Returns

BONAS IMPORT EXPORT  vs.  TRANSILVANIA LEASING SI

BONAS IMPORT EXPORT

Risk-Adjusted Performance

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 very healthy basic indicators, BONAS IMPORT is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

TRANSILVANIA LEASING

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRANSILVANIA LEASING SI are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TRANSILVANIA LEASING displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BONAS IMPORT and TRANSILVANIA LEASING

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

The idea behind BONAS IMPORT EXPORT and TRANSILVANIA LEASING SI 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.