Correlation Between Patria Bank and AROBS TRANSILVANIA

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

By analyzing existing cross correlation between Patria Bank SA and AROBS TRANSILVANIA SOFTWARE, you can compare the effects of market volatilities on Patria Bank and AROBS TRANSILVANIA 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 Patria Bank with a short position of AROBS TRANSILVANIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Bank and AROBS TRANSILVANIA.

Diversification Opportunities for Patria Bank and AROBS TRANSILVANIA

-0.57

Correlation Coefficient

Patria Bank  AROBS TRANSILVANIA

Excellent diversification

The 3 months correlation between Patria and AROBS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Patria Bank SA and AROBS TRANSILVANIA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AROBS TRANSILVANIA and Patria Bank 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 Patria Bank SA are associated (or correlated) with AROBS TRANSILVANIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AROBS TRANSILVANIA has no effect on the direction of Patria Bank i.e., Patria Bank and AROBS TRANSILVANIA go up and down completely randomly.

Pair Corralation between Patria Bank and AROBS TRANSILVANIA

Assuming the 90 days trading horizon Patria Bank SA is expected to generate 0.94 times more return on investment than AROBS TRANSILVANIA. However, Patria Bank SA is 1.07 times less risky than AROBS TRANSILVANIA. It trades about 0.01 of its potential returns per unit of risk. AROBS TRANSILVANIA SOFTWARE is currently generating about -0.19 per unit of risk. If you would invest  8.20  in Patria Bank SA on December 30, 2024 and sell it today you would earn a total of  0.05  from holding Patria Bank SA or generate 0.61% return on investment over 90 days.

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

Patria Bank SA  vs.  AROBS TRANSILVANIA SOFTWARE

Patria Bank SA

Risk-Adjusted Performance

Weak

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

AROBS TRANSILVANIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days AROBS TRANSILVANIA SOFTWARE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Patria Bank and AROBS TRANSILVANIA

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

The idea behind Patria Bank SA and AROBS TRANSILVANIA SOFTWARE 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.