Correlation Between GRUPUL INDUSTRIAL and Remarul 16

Can any of the company-specific risk be diversified away by investing in both GRUPUL INDUSTRIAL and Remarul 16 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 GRUPUL INDUSTRIAL and Remarul 16 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GRUPUL INDUSTRIAL ELECTROCONTACT and Remarul 16 Februarie, you can compare the effects of market volatilities on GRUPUL INDUSTRIAL and Remarul 16 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 GRUPUL INDUSTRIAL with a short position of Remarul 16. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPUL INDUSTRIAL and Remarul 16.

Diversification Opportunities for GRUPUL INDUSTRIAL and Remarul 16

-0.62

Correlation Coefficient

GRUPUL INDUSTRIAL  Remarul 16

Excellent diversification

The 3 months correlation between GRUPUL and Remarul is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding GRUPUL INDUSTRIAL ELECTROCONTA and Remarul 16 Februarie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remarul 16 Februarie and GRUPUL INDUSTRIAL 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 GRUPUL INDUSTRIAL ELECTROCONTACT are associated (or correlated) with Remarul 16. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remarul 16 Februarie has no effect on the direction of GRUPUL INDUSTRIAL i.e., GRUPUL INDUSTRIAL and Remarul 16 go up and down completely randomly.

Pair Corralation between GRUPUL INDUSTRIAL and Remarul 16

Assuming the 90 days trading horizon GRUPUL INDUSTRIAL ELECTROCONTACT is expected to generate 20.16 times more return on investment than Remarul 16. However, GRUPUL INDUSTRIAL is 20.16 times more volatile than Remarul 16 Februarie. It trades about 0.08 of its potential returns per unit of risk. Remarul 16 Februarie is currently generating about -0.13 per unit of risk. If you would invest  4.45  in GRUPUL INDUSTRIAL ELECTROCONTACT on December 30, 2024 and sell it today you would earn a total of  0.95  from holding GRUPUL INDUSTRIAL ELECTROCONTACT or generate 21.35% return on investment over 90 days.

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

GRUPUL INDUSTRIAL ELECTROCONTA  vs.  Remarul 16 Februarie

GRUPUL INDUSTRIAL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPUL INDUSTRIAL ELECTROCONTACT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, GRUPUL INDUSTRIAL displayed solid returns over the last few months and may actually be approaching a breakup point.

Remarul 16 Februarie

Risk-Adjusted Performance

Very Weak

Over the last 90 days Remarul 16 Februarie has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Remarul 16 is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GRUPUL INDUSTRIAL and Remarul 16

The main advantage of trading using opposite GRUPUL INDUSTRIAL and Remarul 16 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPUL INDUSTRIAL position performs unexpectedly, Remarul 16 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 Remarul 16 will offset losses from the drop in Remarul 16's long position.

The idea behind GRUPUL INDUSTRIAL ELECTROCONTACT and Remarul 16 Februarie 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.