Correlation Between Global Power and IRPC Public

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

By analyzing existing cross correlation between Global Power Synergy and IRPC Public, you can compare the effects of market volatilities on Global Power and IRPC Public 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 Global Power with a short position of IRPC Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Power and IRPC Public.

Diversification Opportunities for Global Power and IRPC Public

0.88

Correlation Coefficient

Global Power  IRPC Public

Very poor diversification

The 3 months correlation between Global and IRPC is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Global Power Synergy and IRPC Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRPC Public and Global Power 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 Global Power Synergy are associated (or correlated) with IRPC Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRPC Public has no effect on the direction of Global Power i.e., Global Power and IRPC Public go up and down completely randomly.

Pair Corralation between Global Power and IRPC Public

Assuming the 90 days trading horizon Global Power Synergy is expected to under-perform the IRPC Public. But the stock apears to be less risky and, when comparing its historical volatility, Global Power Synergy is 21.48 times less risky than IRPC Public. The stock trades about -0.06 of its potential returns per unit of risk. The IRPC Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  303.00  in IRPC Public on October 11, 2024 and sell it today you would lose (186.00) from holding IRPC Public or give up 61.39% of portfolio value over 90 days.

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

Global Power Synergy  vs.  IRPC Public

Global Power Synergy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Power Synergy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

IRPC Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IRPC Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Global Power and IRPC Public

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

The idea behind Global Power Synergy and IRPC Public 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.