Correlation Between Inbar Group and Aquarius Engines

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

By analyzing existing cross correlation between Inbar Group Finance and Aquarius Engines AM, you can compare the effects of market volatilities on Inbar Group and Aquarius Engines 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 Inbar Group with a short position of Aquarius Engines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inbar Group and Aquarius Engines.

Diversification Opportunities for Inbar Group and Aquarius Engines

-0.75

Correlation Coefficient

Inbar Group  Aquarius Engines

Pay attention - limited upside

The 3 months correlation between Inbar and Aquarius is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Inbar Group Finance and Aquarius Engines AM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquarius Engines and Inbar Group 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 Inbar Group Finance are associated (or correlated) with Aquarius Engines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquarius Engines has no effect on the direction of Inbar Group i.e., Inbar Group and Aquarius Engines go up and down completely randomly.

Pair Corralation between Inbar Group and Aquarius Engines

Assuming the 90 days trading horizon Inbar Group Finance is expected to generate 1.14 times more return on investment than Aquarius Engines. However, Inbar Group is 1.14 times more volatile than Aquarius Engines AM. It trades about 0.21 of its potential returns per unit of risk. Aquarius Engines AM is currently generating about -0.18 per unit of risk. If you would invest  21,250  in Inbar Group Finance on September 3, 2024 and sell it today you would earn a total of  11,170  from holding Inbar Group Finance or generate 52.56% return on investment over 90 days.

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

Inbar Group Finance  vs.  Aquarius Engines AM

Inbar Group Finance

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Inbar Group Finance are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inbar Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Aquarius Engines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquarius Engines AM 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 basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Inbar Group and Aquarius Engines

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

The idea behind Inbar Group Finance and Aquarius Engines AM 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.