Correlation Between Inbar Group and Gold Bond

Can any of the company-specific risk be diversified away by investing in both Inbar Group and Gold Bond 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 Gold Bond 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 The Gold Bond, you can compare the effects of market volatilities on Inbar Group and Gold Bond 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 Gold Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inbar Group and Gold Bond.

Diversification Opportunities for Inbar Group and Gold Bond

0.55

Correlation Coefficient

Inbar Group  Gold Bond

Very weak diversification

The 3 months correlation between Inbar and Gold is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Inbar Group Finance and The Gold Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bond 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 Gold Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bond has no effect on the direction of Inbar Group i.e., Inbar Group and Gold Bond go up and down completely randomly.

Pair Corralation between Inbar Group and Gold Bond

Assuming the 90 days trading horizon Inbar Group Finance is expected to generate 7.0 times more return on investment than Gold Bond. However, Inbar Group is 7.0 times more volatile than The Gold Bond. It trades about 0.14 of its potential returns per unit of risk. The Gold Bond is currently generating about 0.06 per unit of risk. If you would invest  38,740  in Inbar Group Finance on December 29, 2024 and sell it today you would earn a total of  30,020  from holding Inbar Group Finance or generate 77.49% return on investment over 90 days.

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

Inbar Group Finance  vs.  The Gold Bond

Inbar Group Finance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inbar Group Finance are ranked lower than 10 (%) 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.

Gold Bond

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gold Bond are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gold Bond may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Inbar Group and Gold Bond

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

The idea behind Inbar Group Finance and The Gold Bond 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.