Correlation Between IM Vinaria and GRUPUL INDUSTRIAL

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

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

Diversification Opportunities for IM Vinaria and GRUPUL INDUSTRIAL

0.28

Correlation Coefficient

IM Vinaria  GRUPUL INDUSTRIAL

Modest diversification

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

Pair Corralation between IM Vinaria and GRUPUL INDUSTRIAL

Assuming the 90 days trading horizon IM Vinaria is expected to generate 7.86 times less return on investment than GRUPUL INDUSTRIAL. But when comparing it to its historical volatility, IM Vinaria Purcari is 7.3 times less risky than GRUPUL INDUSTRIAL. It trades about 0.08 of its potential returns per unit of risk. GRUPUL INDUSTRIAL ELECTROCONTACT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4.45  in GRUPUL INDUSTRIAL ELECTROCONTACT on December 29, 2024 and sell it today you would earn a total of  0.95  from holding GRUPUL INDUSTRIAL ELECTROCONTACT or generate 21.35% return on investment over 90 days.

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

IM Vinaria Purcari  vs.  GRUPUL INDUSTRIAL ELECTROCONTA

IM Vinaria Purcari

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in IM Vinaria Purcari are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

GRUPUL INDUSTRIAL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPUL INDUSTRIAL ELECTROCONTACT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, GRUPUL INDUSTRIAL displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IM Vinaria and GRUPUL INDUSTRIAL

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

The idea behind IM Vinaria Purcari and GRUPUL INDUSTRIAL ELECTROCONTACT 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.