Correlation Between Fras Le and Intelbras

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

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

Diversification Opportunities for Fras Le and Intelbras

0.44

Correlation Coefficient

Fras Le  Intelbras

Very weak diversification

The 3 months correlation between Fras and Intelbras is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fras le SA and Intelbras SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelbras SA and Fras Le 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 Fras le SA are associated (or correlated) with Intelbras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelbras SA has no effect on the direction of Fras Le i.e., Fras Le and Intelbras go up and down completely randomly.

Pair Corralation between Fras Le and Intelbras

Assuming the 90 days trading horizon Fras le SA is expected to generate 0.66 times more return on investment than Intelbras. However, Fras le SA is 1.53 times less risky than Intelbras. It trades about -0.07 of its potential returns per unit of risk. Intelbras SA is currently generating about -0.45 per unit of risk. If you would invest  2,129  in Fras le SA on October 6, 2024 and sell it today you would lose (91.00) from holding Fras le SA or give up 4.27% of portfolio value over 90 days.

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

Fras le SA  vs.  Intelbras SA

Fras le SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fras le SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fras Le is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Intelbras SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelbras SA 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.

Pair Trading with Fras Le and Intelbras

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

The idea behind Fras le SA and Intelbras 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.