Correlation Between Immobel and Montea CVA

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

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

Diversification Opportunities for Immobel and Montea CVA

0.93

Correlation Coefficient

Immobel  Montea CVA

Almost no diversification

The 3 months correlation between Immobel and Montea is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Immobel and Montea CVA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montea CVA and Immobel 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 Immobel are associated (or correlated) with Montea CVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montea CVA has no effect on the direction of Immobel i.e., Immobel and Montea CVA go up and down completely randomly.

Pair Corralation between Immobel and Montea CVA

Assuming the 90 days trading horizon Immobel is expected to under-perform the Montea CVA. In addition to that, Immobel is 1.14 times more volatile than Montea CVA. It trades about -0.33 of its total potential returns per unit of risk. Montea CVA is currently generating about -0.14 per unit of volatility. If you would invest  7,650  in Montea CVA on September 3, 2024 and sell it today you would lose (980.00) from holding Montea CVA or give up 12.81% of portfolio value over 90 days.

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

Immobel  vs.  Montea CVA

Immobel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immobel has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Montea CVA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Montea CVA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Immobel and Montea CVA

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

The idea behind Immobel and Montea CVA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.