Correlation Between Germina Agribusiness and TRANSILVANIA INVESTMENTS

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

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

Diversification Opportunities for Germina Agribusiness and TRANSILVANIA INVESTMENTS

0.05

Correlation Coefficient

Germina Agribusiness  TRANSILVANIA INVESTMENTS

Significant diversification

The 3 months correlation between Germina and TRANSILVANIA is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Germina Agribusiness SA and TRANSILVANIA INVESTMENTS ALLIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA INVESTMENTS and Germina Agribusiness 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 Germina Agribusiness SA are associated (or correlated) with TRANSILVANIA INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA INVESTMENTS has no effect on the direction of Germina Agribusiness i.e., Germina Agribusiness and TRANSILVANIA INVESTMENTS go up and down completely randomly.

Pair Corralation between Germina Agribusiness and TRANSILVANIA INVESTMENTS

Assuming the 90 days trading horizon Germina Agribusiness SA is expected to generate 1.79 times more return on investment than TRANSILVANIA INVESTMENTS. However, Germina Agribusiness is 1.79 times more volatile than TRANSILVANIA INVESTMENTS ALLIANCE. It trades about 0.03 of its potential returns per unit of risk. TRANSILVANIA INVESTMENTS ALLIANCE is currently generating about -0.07 per unit of risk. If you would invest  165.00  in Germina Agribusiness SA on December 27, 2024 and sell it today you would earn a total of  5.00  from holding Germina Agribusiness SA or generate 3.03% return on investment over 90 days.

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

Germina Agribusiness SA  vs.  TRANSILVANIA INVESTMENTS ALLIA

Germina Agribusiness

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Germina Agribusiness SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Germina Agribusiness is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TRANSILVANIA INVESTMENTS

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRANSILVANIA INVESTMENTS ALLIANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Germina Agribusiness and TRANSILVANIA INVESTMENTS

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

The idea behind Germina Agribusiness SA and TRANSILVANIA INVESTMENTS ALLIANCE 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.