Correlation Between Instalco Intressenter and Sdiptech

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

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

Diversification Opportunities for Instalco Intressenter and Sdiptech

-0.28

Correlation Coefficient

Instalco Intressenter  Sdiptech

Very good diversification

The 3 months correlation between Instalco and Sdiptech is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Instalco Intressenter AB and Sdiptech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdiptech AB and Instalco Intressenter 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 Instalco Intressenter AB are associated (or correlated) with Sdiptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdiptech AB has no effect on the direction of Instalco Intressenter i.e., Instalco Intressenter and Sdiptech go up and down completely randomly.

Pair Corralation between Instalco Intressenter and Sdiptech

Assuming the 90 days trading horizon Instalco Intressenter AB is expected to generate 1.32 times more return on investment than Sdiptech. However, Instalco Intressenter is 1.32 times more volatile than Sdiptech AB. It trades about 0.09 of its potential returns per unit of risk. Sdiptech AB is currently generating about -0.03 per unit of risk. If you would invest  3,076  in Instalco Intressenter AB on November 29, 2024 and sell it today you would earn a total of  384.00  from holding Instalco Intressenter AB or generate 12.48% return on investment over 90 days.

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

Instalco Intressenter AB  vs.  Sdiptech AB

Instalco Intressenter

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Instalco Intressenter AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Instalco Intressenter sustained solid returns over the last few months and may actually be approaching a breakup point.

Sdiptech AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sdiptech AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Sdiptech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Instalco Intressenter and Sdiptech

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

The idea behind Instalco Intressenter AB and Sdiptech AB 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.