Correlation Between Compa Sibiu and TRANSILVANIA INVESTMENTS

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

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

Diversification Opportunities for Compa Sibiu and TRANSILVANIA INVESTMENTS

-0.25

Correlation Coefficient

Compa Sibiu  TRANSILVANIA INVESTMENTS

Very good diversification

The 3 months correlation between Compa and TRANSILVANIA is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Compa Sibiu and TRANSILVANIA INVESTMENTS ALLIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA INVESTMENTS and Compa Sibiu 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 Compa Sibiu 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 Compa Sibiu i.e., Compa Sibiu and TRANSILVANIA INVESTMENTS go up and down completely randomly.

Pair Corralation between Compa Sibiu and TRANSILVANIA INVESTMENTS

Assuming the 90 days trading horizon Compa Sibiu is expected to under-perform the TRANSILVANIA INVESTMENTS. But the stock apears to be less risky and, when comparing its historical volatility, Compa Sibiu is 1.09 times less risky than TRANSILVANIA INVESTMENTS. The stock trades about -0.07 of its potential returns per unit of risk. The TRANSILVANIA INVESTMENTS ALLIANCE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  36.00  in TRANSILVANIA INVESTMENTS ALLIANCE on September 14, 2024 and sell it today you would earn a total of  2.00  from holding TRANSILVANIA INVESTMENTS ALLIANCE or generate 5.56% return on investment over 90 days.

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

Compa Sibiu  vs.  TRANSILVANIA INVESTMENTS ALLIA

Compa Sibiu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compa Sibiu has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

TRANSILVANIA INVESTMENTS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TRANSILVANIA INVESTMENTS ALLIANCE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, TRANSILVANIA INVESTMENTS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Compa Sibiu and TRANSILVANIA INVESTMENTS

The main advantage of trading using opposite Compa Sibiu and TRANSILVANIA INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compa Sibiu 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 Compa Sibiu 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 Commodity Directory module to find actively traded commodities issued by global exchanges.