Correlation Between Electromagnetica and AROBS TRANSILVANIA

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

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

Diversification Opportunities for Electromagnetica and AROBS TRANSILVANIA

0.37

Correlation Coefficient

Electromagnetica  AROBS TRANSILVANIA

Weak diversification

The 3 months correlation between Electromagnetica and AROBS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Electromagnetica SA and AROBS TRANSILVANIA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AROBS TRANSILVANIA and Electromagnetica 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 Electromagnetica SA are associated (or correlated) with AROBS TRANSILVANIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AROBS TRANSILVANIA has no effect on the direction of Electromagnetica i.e., Electromagnetica and AROBS TRANSILVANIA go up and down completely randomly.

Pair Corralation between Electromagnetica and AROBS TRANSILVANIA

Assuming the 90 days trading horizon Electromagnetica SA is expected to generate 0.54 times more return on investment than AROBS TRANSILVANIA. However, Electromagnetica SA is 1.86 times less risky than AROBS TRANSILVANIA. It trades about 0.13 of its potential returns per unit of risk. AROBS TRANSILVANIA SOFTWARE is currently generating about 0.07 per unit of risk. If you would invest  20.00  in Electromagnetica SA on September 27, 2024 and sell it today you would earn a total of  1.00  from holding Electromagnetica SA or generate 5.0% return on investment over 90 days.

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

Electromagnetica SA  vs.  AROBS TRANSILVANIA SOFTWARE

Electromagnetica

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Electromagnetica SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Electromagnetica may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AROBS TRANSILVANIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AROBS TRANSILVANIA SOFTWARE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Electromagnetica and AROBS TRANSILVANIA

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

The idea behind Electromagnetica SA and AROBS TRANSILVANIA SOFTWARE 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..