Correlation Between Turism Hotelur and Germina Agribusiness

Can any of the company-specific risk be diversified away by investing in both Turism Hotelur and Germina Agribusiness 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 Turism Hotelur and Germina Agribusiness into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turism Hotelur and Germina Agribusiness SA, you can compare the effects of market volatilities on Turism Hotelur and Germina Agribusiness 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 Turism Hotelur with a short position of Germina Agribusiness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turism Hotelur and Germina Agribusiness.

Diversification Opportunities for Turism Hotelur and Germina Agribusiness

0.13

Correlation Coefficient

Turism Hotelur  Germina Agribusiness

Average diversification

The 3 months correlation between Turism and Germina is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Turism Hotelur and Germina Agribusiness SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Germina Agribusiness and Turism Hotelur 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 Turism Hotelur are associated (or correlated) with Germina Agribusiness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Germina Agribusiness has no effect on the direction of Turism Hotelur i.e., Turism Hotelur and Germina Agribusiness go up and down completely randomly.

Pair Corralation between Turism Hotelur and Germina Agribusiness

Assuming the 90 days trading horizon Turism Hotelur is expected to generate 1.19 times less return on investment than Germina Agribusiness. But when comparing it to its historical volatility, Turism Hotelur is 1.28 times less risky than Germina Agribusiness. It trades about 0.05 of its potential returns per unit of risk. Germina Agribusiness SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  103.00  in Germina Agribusiness SA on October 9, 2024 and sell it today you would earn a total of  62.00  from holding Germina Agribusiness SA or generate 60.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Turism Hotelur  vs.  Germina Agribusiness SA

Turism Hotelur

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Turism Hotelur has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Turism Hotelur may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Germina Agribusiness

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Turism Hotelur and Germina Agribusiness

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

The idea behind Turism Hotelur and Germina Agribusiness SA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .