Correlation Between Iproeb SA and Fondul Deschis

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

By analyzing existing cross correlation between Iproeb SA and Fondul Deschis De, you can compare the effects of market volatilities on Iproeb SA and Fondul Deschis 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 Fondul Deschis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iproeb SA and Fondul Deschis.

Diversification Opportunities for Iproeb SA and Fondul Deschis

0.8

Correlation Coefficient

Iproeb SA  Fondul Deschis

Very poor diversification

The 3 months correlation between Iproeb and Fondul is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Iproeb SA and Fondul Deschis De in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fondul Deschis De 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 Fondul Deschis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fondul Deschis De has no effect on the direction of Iproeb SA i.e., Iproeb SA and Fondul Deschis go up and down completely randomly.

Pair Corralation between Iproeb SA and Fondul Deschis

Assuming the 90 days trading horizon Iproeb SA is expected to generate 3.29 times more return on investment than Fondul Deschis. However, Iproeb SA is 3.29 times more volatile than Fondul Deschis De. It trades about 0.1 of its potential returns per unit of risk. Fondul Deschis De is currently generating about 0.1 per unit of risk. If you would invest  46.00  in Iproeb SA on September 26, 2024 and sell it today you would earn a total of  87.00  from holding Iproeb SA or generate 189.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	88.24%
Values	Daily Returns

Iproeb SA  vs.  Fondul Deschis De

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.

Fondul Deschis De

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fondul Deschis De has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fondul Deschis is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Iproeb SA and Fondul Deschis

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

The idea behind Iproeb SA and Fondul Deschis De 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.