Correlation Between Remarul 16 and Promateris

Can any of the company-specific risk be diversified away by investing in both Remarul 16 and Promateris 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 Remarul 16 and Promateris into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Remarul 16 Februarie and Promateris SA, you can compare the effects of market volatilities on Remarul 16 and Promateris 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 Remarul 16 with a short position of Promateris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Remarul 16 and Promateris.

Diversification Opportunities for Remarul 16 and Promateris

0.13

Correlation Coefficient

Remarul 16  Promateris

Average diversification

The 3 months correlation between Remarul and Promateris is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Remarul 16 Februarie and Promateris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promateris SA and Remarul 16 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 Remarul 16 Februarie are associated (or correlated) with Promateris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promateris SA has no effect on the direction of Remarul 16 i.e., Remarul 16 and Promateris go up and down completely randomly.

Pair Corralation between Remarul 16 and Promateris

Assuming the 90 days trading horizon Remarul 16 Februarie is expected to generate 0.16 times more return on investment than Promateris. However, Remarul 16 Februarie is 6.19 times less risky than Promateris. It trades about -0.15 of its potential returns per unit of risk. Promateris SA is currently generating about -0.03 per unit of risk. If you would invest  2,740  in Remarul 16 Februarie on October 10, 2024 and sell it today you would lose (180.00) from holding Remarul 16 Februarie or give up 6.57% of portfolio value over 90 days.

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

Remarul 16 Februarie  vs.  Promateris SA

Remarul 16 Februarie

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Remarul 16 Februarie has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Promateris SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Promateris SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Remarul 16 and Promateris

The main advantage of trading using opposite Remarul 16 and Promateris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Remarul 16 position performs unexpectedly, Promateris 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 Promateris will offset losses from the drop in Promateris' long position.

The idea behind Remarul 16 Februarie and Promateris SA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..