Correlation Between Muramoto Electron and Inter Pharma

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

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

Diversification Opportunities for Muramoto Electron and Inter Pharma

-0.13

Correlation Coefficient

Muramoto Electron  Inter Pharma

Good diversification

The 3 months correlation between Muramoto and Inter is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Muramoto Electron Public and Inter Pharma Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Pharma Public and Muramoto Electron 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 Muramoto Electron Public are associated (or correlated) with Inter Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Pharma Public has no effect on the direction of Muramoto Electron i.e., Muramoto Electron and Inter Pharma go up and down completely randomly.

Pair Corralation between Muramoto Electron and Inter Pharma

Assuming the 90 days trading horizon Muramoto Electron is expected to generate 4.08 times less return on investment than Inter Pharma. But when comparing it to its historical volatility, Muramoto Electron Public is 5.61 times less risky than Inter Pharma. It trades about 0.08 of its potential returns per unit of risk. Inter Pharma Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  324.00  in Inter Pharma Public on December 23, 2024 and sell it today you would earn a total of  38.00  from holding Inter Pharma Public or generate 11.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Muramoto Electron Public  vs.  Inter Pharma Public

Muramoto Electron Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Muramoto Electron Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Muramoto Electron is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Inter Pharma Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Pharma Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Inter Pharma disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Muramoto Electron and Inter Pharma

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

The idea behind Muramoto Electron Public and Inter Pharma Public 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.