Correlation Between Iproeb SA and Turism Felix

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

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

Diversification Opportunities for Iproeb SA and Turism Felix

-0.43

Correlation Coefficient

Iproeb SA  Turism Felix

Very good diversification

The 3 months correlation between Iproeb and Turism is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Iproeb SA and Turism Felix B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turism Felix B and Iproeb 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 Iproeb SA are associated (or correlated) with Turism Felix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turism Felix B has no effect on the direction of Iproeb SA i.e., Iproeb SA and Turism Felix go up and down completely randomly.

Pair Corralation between Iproeb SA and Turism Felix

Assuming the 90 days trading horizon Iproeb SA is expected to generate 1.01 times more return on investment than Turism Felix. However, Iproeb SA is 1.01 times more volatile than Turism Felix B. It trades about 0.11 of its potential returns per unit of risk. Turism Felix B is currently generating about 0.02 per unit of risk. If you would invest  46.00  in Iproeb SA on September 28, 2024 and sell it today you would earn a total of  90.00  from holding Iproeb SA or generate 195.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.75%
Values	Daily Returns

Iproeb SA  vs.  Turism Felix B

Iproeb SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iproeb SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Turism Felix B

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turism Felix B are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Turism Felix is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Iproeb SA and Turism Felix

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

The idea behind Iproeb SA and Turism Felix B 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.