Correlation Between Fondul Deschis and Iproeb SA

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

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

Diversification Opportunities for Fondul Deschis and Iproeb SA

0.8

Correlation Coefficient

Fondul Deschis  Iproeb SA

Very poor diversification

The 3 months correlation between Fondul and Iproeb is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fondul Deschis De and Iproeb SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iproeb SA and Fondul Deschis 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 Fondul Deschis De 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 Fondul Deschis i.e., Fondul Deschis and Iproeb SA go up and down completely randomly.

Pair Corralation between Fondul Deschis and Iproeb SA

Assuming the 90 days trading horizon Fondul Deschis is expected to generate 3.44 times less return on investment than Iproeb SA. But when comparing it to its historical volatility, Fondul Deschis De is 3.29 times less risky than Iproeb SA. It trades about 0.1 of its potential returns per unit of risk. Iproeb SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  46.00  in Iproeb SA on September 26, 2024 and sell it today you would earn a total of  87.00  from holding Iproeb SA or generate 189.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	88.24%
Values	Daily Returns

Fondul Deschis De  vs.  Iproeb SA

Fondul Deschis De

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fondul Deschis De has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fondul Deschis is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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 Fondul Deschis and Iproeb SA

The main advantage of trading using opposite Fondul Deschis and Iproeb SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fondul Deschis 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 Fondul Deschis De 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.