Correlation Between Commercial Vehicle and Infrastrutture Wireless

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

By analyzing existing cross correlation between Commercial Vehicle Group and Infrastrutture Wireless Italiane, you can compare the effects of market volatilities on Commercial Vehicle and Infrastrutture Wireless 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 Commercial Vehicle with a short position of Infrastrutture Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Infrastrutture Wireless.

Diversification Opportunities for Commercial Vehicle and Infrastrutture Wireless

0.89

Correlation Coefficient

Commercial Vehicle  Infrastrutture Wireless

Very poor diversification

The 3 months correlation between Commercial and Infrastrutture is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Infrastrutture Wireless Italia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastrutture Wireless and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with Infrastrutture Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastrutture Wireless has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Infrastrutture Wireless go up and down completely randomly.

Pair Corralation between Commercial Vehicle and Infrastrutture Wireless

Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Infrastrutture Wireless. In addition to that, Commercial Vehicle is 3.61 times more volatile than Infrastrutture Wireless Italiane. It trades about -0.12 of its total potential returns per unit of risk. Infrastrutture Wireless Italiane is currently generating about 0.01 per unit of volatility. If you would invest  968.00  in Infrastrutture Wireless Italiane on October 4, 2024 and sell it today you would earn a total of  10.00  from holding Infrastrutture Wireless Italiane or generate 1.03% return on investment over 90 days.

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

Commercial Vehicle Group  vs.  Infrastrutture Wireless Italia

Commercial Vehicle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commercial Vehicle Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Infrastrutture Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infrastrutture Wireless Italiane has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Commercial Vehicle and Infrastrutture Wireless

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

The idea behind Commercial Vehicle Group and Infrastrutture Wireless Italiane 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.

Check out your portfolio center.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.