Correlation Between Germina Agribusiness and TRANSILVANIA LEASING

Can any of the company-specific risk be diversified away by investing in both Germina Agribusiness and TRANSILVANIA LEASING 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 LEASING 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 LEASING SI, you can compare the effects of market volatilities on Germina Agribusiness and TRANSILVANIA LEASING 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 LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Germina Agribusiness and TRANSILVANIA LEASING.

Diversification Opportunities for Germina Agribusiness and TRANSILVANIA LEASING

0.47

Correlation Coefficient

Germina Agribusiness  TRANSILVANIA LEASING

Very weak diversification

The 3 months correlation between Germina and TRANSILVANIA is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Germina Agribusiness SA and TRANSILVANIA LEASING SI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA LEASING 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 LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA LEASING has no effect on the direction of Germina Agribusiness i.e., Germina Agribusiness and TRANSILVANIA LEASING go up and down completely randomly.

Pair Corralation between Germina Agribusiness and TRANSILVANIA LEASING

Assuming the 90 days trading horizon Germina Agribusiness is expected to generate 1.2 times less return on investment than TRANSILVANIA LEASING. In addition to that, Germina Agribusiness is 1.01 times more volatile than TRANSILVANIA LEASING SI. It trades about 0.05 of its total potential returns per unit of risk. TRANSILVANIA LEASING SI is currently generating about 0.05 per unit of volatility. If you would invest  4.21  in TRANSILVANIA LEASING SI on October 9, 2024 and sell it today you would earn a total of  4.24  from holding TRANSILVANIA LEASING SI or generate 100.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.48%
Values	Daily Returns

Germina Agribusiness SA  vs.  TRANSILVANIA LEASING SI

Germina Agribusiness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Germina Agribusiness SA has generated negative risk-adjusted returns adding no value to investors with long positions. 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 LEASING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRANSILVANIA LEASING SI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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.

Pair Trading with Germina Agribusiness and TRANSILVANIA LEASING

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

The idea behind Germina Agribusiness SA and TRANSILVANIA LEASING SI 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..