Correlation Between Fondul Deschis and Remarul 16

Can any of the company-specific risk be diversified away by investing in both Fondul Deschis and Remarul 16 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 Remarul 16 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 Remarul 16 Februarie, you can compare the effects of market volatilities on Fondul Deschis and Remarul 16 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 Remarul 16. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fondul Deschis and Remarul 16.

Diversification Opportunities for Fondul Deschis and Remarul 16

0.39

Correlation Coefficient

Fondul Deschis  Remarul 16

Weak diversification

The 3 months correlation between Fondul and Remarul is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fondul Deschis De and Remarul 16 Februarie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remarul 16 Februarie 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 Remarul 16. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remarul 16 Februarie has no effect on the direction of Fondul Deschis i.e., Fondul Deschis and Remarul 16 go up and down completely randomly.

Pair Corralation between Fondul Deschis and Remarul 16

Assuming the 90 days trading horizon Fondul Deschis De is expected to generate 1.3 times more return on investment than Remarul 16. However, Fondul Deschis is 1.3 times more volatile than Remarul 16 Februarie. It trades about -0.05 of its potential returns per unit of risk. Remarul 16 Februarie is currently generating about -0.12 per unit of risk. If you would invest  2,870  in Fondul Deschis De on September 27, 2024 and sell it today you would lose (183.00) from holding Fondul Deschis De or give up 6.38% of portfolio value over 90 days.

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

Fondul Deschis De  vs.  Remarul 16 Februarie

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.

Remarul 16 Februarie

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Remarul 16 Februarie 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 Fondul Deschis and Remarul 16

The main advantage of trading using opposite Fondul Deschis and Remarul 16 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fondul Deschis position performs unexpectedly, Remarul 16 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 Remarul 16 will offset losses from the drop in Remarul 16's long position.

The idea behind Fondul Deschis De and Remarul 16 Februarie 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.