Correlation Between Intralot and Public Power

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

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

Diversification Opportunities for Intralot and Public Power

0.65

Correlation Coefficient

Intralot  Public Power

Poor diversification

The 3 months correlation between Intralot and Public is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Intralot SA Integrated and Public Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Power and Intralot 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 Intralot SA Integrated are associated (or correlated) with Public Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Power has no effect on the direction of Intralot i.e., Intralot and Public Power go up and down completely randomly.

Pair Corralation between Intralot and Public Power

Assuming the 90 days trading horizon Intralot is expected to generate 3.41 times less return on investment than Public Power. In addition to that, Intralot is 1.16 times more volatile than Public Power. It trades about 0.05 of its total potential returns per unit of risk. Public Power is currently generating about 0.19 per unit of volatility. If you would invest  1,190  in Public Power on December 24, 2024 and sell it today you would earn a total of  186.00  from holding Public Power or generate 15.63% return on investment over 90 days.

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

Intralot SA Integrated  vs.  Public Power

Intralot SA Integrated

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intralot SA Integrated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Intralot is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Public Power

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Public Power unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intralot and Public Power

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

The idea behind Intralot SA Integrated and Public Power 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.