Correlation Between CIG Pannonia and Appeninn Nyrt

Can any of the company-specific risk be diversified away by investing in both CIG Pannonia and Appeninn Nyrt 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 CIG Pannonia and Appeninn Nyrt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CIG Pannonia Life and Appeninn Nyrt, you can compare the effects of market volatilities on CIG Pannonia and Appeninn Nyrt 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 CIG Pannonia with a short position of Appeninn Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIG Pannonia and Appeninn Nyrt.

Diversification Opportunities for CIG Pannonia and Appeninn Nyrt

0.03

Correlation Coefficient

CIG Pannonia  Appeninn Nyrt

Significant diversification

The 3 months correlation between CIG and Appeninn is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CIG Pannonia Life and Appeninn Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appeninn Nyrt and CIG Pannonia 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 CIG Pannonia Life are associated (or correlated) with Appeninn Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appeninn Nyrt has no effect on the direction of CIG Pannonia i.e., CIG Pannonia and Appeninn Nyrt go up and down completely randomly.

Pair Corralation between CIG Pannonia and Appeninn Nyrt

Assuming the 90 days trading horizon CIG Pannonia Life is expected to under-perform the Appeninn Nyrt. In addition to that, CIG Pannonia is 1.35 times more volatile than Appeninn Nyrt. It trades about 0.0 of its total potential returns per unit of risk. Appeninn Nyrt is currently generating about 0.36 per unit of volatility. If you would invest  66,600  in Appeninn Nyrt on December 30, 2024 and sell it today you would earn a total of  22,800  from holding Appeninn Nyrt or generate 34.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CIG Pannonia Life  vs.  Appeninn Nyrt

CIG Pannonia Life

Risk-Adjusted Performance

Very Weak

Over the last 90 days CIG Pannonia Life has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, CIG Pannonia is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Appeninn Nyrt

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Appeninn Nyrt are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Appeninn Nyrt sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CIG Pannonia and Appeninn Nyrt

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

The idea behind CIG Pannonia Life and Appeninn Nyrt 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.