Correlation Between Adgar Investments and Carasso

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

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

Diversification Opportunities for Adgar Investments and Carasso

0.93

Correlation Coefficient

Adgar Investments  Carasso

Almost no diversification

The 3 months correlation between Adgar and Carasso is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Adgar Investments and and Carasso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carasso and Adgar Investments 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 Adgar Investments and are associated (or correlated) with Carasso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carasso has no effect on the direction of Adgar Investments i.e., Adgar Investments and Carasso go up and down completely randomly.

Pair Corralation between Adgar Investments and Carasso

Assuming the 90 days trading horizon Adgar Investments is expected to generate 1.3 times less return on investment than Carasso. In addition to that, Adgar Investments is 1.04 times more volatile than Carasso. It trades about 0.41 of its total potential returns per unit of risk. Carasso is currently generating about 0.55 per unit of volatility. If you would invest  215,700  in Carasso on September 14, 2024 and sell it today you would earn a total of  45,200  from holding Carasso or generate 20.96% return on investment over 90 days.

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

Adgar Investments and  vs.  Carasso

Adgar Investments

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Adgar Investments and are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adgar Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Carasso

Risk-Adjusted Performance

26 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carasso are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Carasso sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adgar Investments and Carasso

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

The idea behind Adgar Investments and and Carasso 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.