Correlation Between GRUPUL INDUSTRIAL and Turism Felix

Can any of the company-specific risk be diversified away by investing in both GRUPUL INDUSTRIAL and Turism Felix 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 Turism Felix 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 Turism Felix B, you can compare the effects of market volatilities on GRUPUL INDUSTRIAL and Turism Felix 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 Turism Felix. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPUL INDUSTRIAL and Turism Felix.

Diversification Opportunities for GRUPUL INDUSTRIAL and Turism Felix

0.59

Correlation Coefficient

GRUPUL INDUSTRIAL  Turism Felix

Very weak diversification

The 3 months correlation between GRUPUL and Turism is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GRUPUL INDUSTRIAL ELECTROCONTA and Turism Felix B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turism Felix B 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 Turism Felix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turism Felix B has no effect on the direction of GRUPUL INDUSTRIAL i.e., GRUPUL INDUSTRIAL and Turism Felix go up and down completely randomly.

Pair Corralation between GRUPUL INDUSTRIAL and Turism Felix

Assuming the 90 days trading horizon GRUPUL INDUSTRIAL is expected to generate 1.13 times less return on investment than Turism Felix. But when comparing it to its historical volatility, GRUPUL INDUSTRIAL ELECTROCONTACT is 1.62 times less risky than Turism Felix. It trades about 0.11 of its potential returns per unit of risk. Turism Felix B is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Turism Felix B on October 24, 2024 and sell it today you would earn a total of  4.00  from holding Turism Felix B or generate 13.79% return on investment over 90 days.

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

GRUPUL INDUSTRIAL ELECTROCONTA  vs.  Turism Felix B

GRUPUL INDUSTRIAL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPUL INDUSTRIAL ELECTROCONTACT are ranked lower than 8 (%) 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.

Turism Felix B

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turism Felix B are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Turism Felix displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRUPUL INDUSTRIAL and Turism Felix

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

The idea behind GRUPUL INDUSTRIAL ELECTROCONTACT and Turism Felix B 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.