Correlation Between Prashkovsky and Isras Investment

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

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

Diversification Opportunities for Prashkovsky and Isras Investment

0.94

Correlation Coefficient

Prashkovsky  Isras Investment

Almost no diversification

The 3 months correlation between Prashkovsky and Isras is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Prashkovsky and Isras Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isras Investment and Prashkovsky 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 Prashkovsky are associated (or correlated) with Isras Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isras Investment has no effect on the direction of Prashkovsky i.e., Prashkovsky and Isras Investment go up and down completely randomly.

Pair Corralation between Prashkovsky and Isras Investment

Assuming the 90 days trading horizon Prashkovsky is expected to generate 1.34 times more return on investment than Isras Investment. However, Prashkovsky is 1.34 times more volatile than Isras Investment. It trades about 0.29 of its potential returns per unit of risk. Isras Investment is currently generating about 0.3 per unit of risk. If you would invest  868,500  in Prashkovsky on September 15, 2024 and sell it today you would earn a total of  305,500  from holding Prashkovsky or generate 35.18% return on investment over 90 days.

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

Prashkovsky  vs.  Isras Investment

Prashkovsky

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prashkovsky are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Prashkovsky sustained solid returns over the last few months and may actually be approaching a breakup point.

Isras Investment

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Isras Investment are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Isras Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Prashkovsky and Isras Investment

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

The idea behind Prashkovsky and Isras Investment 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.