Correlation Between Turism Felix and IM Vinaria

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

By analyzing existing cross correlation between Turism Felix B and IM Vinaria Purcari, you can compare the effects of market volatilities on Turism Felix and IM Vinaria 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 Turism Felix with a short position of IM Vinaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turism Felix and IM Vinaria.

Diversification Opportunities for Turism Felix and IM Vinaria

-0.28

Correlation Coefficient

Turism Felix  IM Vinaria

Very good diversification

The 3 months correlation between Turism and WINE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Turism Felix B and IM Vinaria Purcari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IM Vinaria Purcari and Turism Felix 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 Turism Felix B are associated (or correlated) with IM Vinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IM Vinaria Purcari has no effect on the direction of Turism Felix i.e., Turism Felix and IM Vinaria go up and down completely randomly.

Pair Corralation between Turism Felix and IM Vinaria

Assuming the 90 days trading horizon Turism Felix B is expected to under-perform the IM Vinaria. In addition to that, Turism Felix is 2.49 times more volatile than IM Vinaria Purcari. It trades about -0.04 of its total potential returns per unit of risk. IM Vinaria Purcari is currently generating about -0.04 per unit of volatility. If you would invest  1,486  in IM Vinaria Purcari on September 29, 2024 and sell it today you would lose (30.00) from holding IM Vinaria Purcari or give up 2.02% of portfolio value over 90 days.

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

Turism Felix B  vs.  IM Vinaria Purcari

Turism Felix B

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turism Felix B are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Turism Felix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

IM Vinaria Purcari

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IM Vinaria Purcari has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IM Vinaria is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Turism Felix and IM Vinaria

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

The idea behind Turism Felix B and IM Vinaria Purcari 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.