Correlation Between Inepar SA and Fras Le

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

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

Diversification Opportunities for Inepar SA and Fras Le

-0.1

Correlation Coefficient

Inepar SA  Fras Le

Good diversification

The 3 months correlation between Inepar and Fras is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Inepar SA Indstria and Fras le SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fras le SA and Inepar SA 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 Inepar SA Indstria are associated (or correlated) with Fras Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fras le SA has no effect on the direction of Inepar SA i.e., Inepar SA and Fras Le go up and down completely randomly.

Pair Corralation between Inepar SA and Fras Le

Assuming the 90 days trading horizon Inepar SA Indstria is expected to under-perform the Fras Le. In addition to that, Inepar SA is 1.7 times more volatile than Fras le SA. It trades about -0.22 of its total potential returns per unit of risk. Fras le SA is currently generating about 0.04 per unit of volatility. If you would invest  2,065  in Fras le SA on September 15, 2024 and sell it today you would earn a total of  63.00  from holding Fras le SA or generate 3.05% return on investment over 90 days.

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

Inepar SA Indstria  vs.  Fras le SA

Inepar SA Indstria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inepar SA Indstria 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fras le SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fras le SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Inepar SA and Fras Le

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

The idea behind Inepar SA Indstria and Fras le 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.