Correlation Between Santierul Naval and Iproeb SA

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

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

Diversification Opportunities for Santierul Naval and Iproeb SA

-0.11

Correlation Coefficient

Santierul Naval  Iproeb SA

Good diversification

The 3 months correlation between Santierul and Iproeb is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Santierul Naval Orsova and Iproeb SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iproeb SA and Santierul Naval 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 Santierul Naval Orsova are associated (or correlated) with Iproeb SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iproeb SA has no effect on the direction of Santierul Naval i.e., Santierul Naval and Iproeb SA go up and down completely randomly.

Pair Corralation between Santierul Naval and Iproeb SA

Assuming the 90 days trading horizon Santierul Naval Orsova is expected to generate 1.0 times more return on investment than Iproeb SA. However, Santierul Naval is 1.0 times more volatile than Iproeb SA. It trades about 0.07 of its potential returns per unit of risk. Iproeb SA is currently generating about -0.05 per unit of risk. If you would invest  605.00  in Santierul Naval Orsova on September 27, 2024 and sell it today you would earn a total of  110.00  from holding Santierul Naval Orsova or generate 18.18% return on investment over 90 days.

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

Santierul Naval Orsova  vs.  Iproeb SA

Santierul Naval Orsova

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Santierul Naval Orsova are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Santierul Naval may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Iproeb SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iproeb SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Santierul Naval and Iproeb SA

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

The idea behind Santierul Naval Orsova and Iproeb 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.