Correlation Between Turism Hotelur and TRANSILVANIA LEASING

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

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

Diversification Opportunities for Turism Hotelur and TRANSILVANIA LEASING

-0.57

Correlation Coefficient

Turism Hotelur  TRANSILVANIA LEASING

Excellent diversification

The 3 months correlation between Turism and TRANSILVANIA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Turism Hotelur and TRANSILVANIA LEASING SI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA LEASING and Turism Hotelur 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 Hotelur are associated (or correlated) with TRANSILVANIA LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA LEASING has no effect on the direction of Turism Hotelur i.e., Turism Hotelur and TRANSILVANIA LEASING go up and down completely randomly.

Pair Corralation between Turism Hotelur and TRANSILVANIA LEASING

Assuming the 90 days trading horizon Turism Hotelur is expected to generate 1.78 times less return on investment than TRANSILVANIA LEASING. But when comparing it to its historical volatility, Turism Hotelur is 1.13 times less risky than TRANSILVANIA LEASING. It trades about 0.02 of its potential returns per unit of risk. TRANSILVANIA LEASING SI is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6.62  in TRANSILVANIA LEASING SI on September 14, 2024 and sell it today you would earn a total of  1.38  from holding TRANSILVANIA LEASING SI or generate 20.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.0%
Values	Daily Returns

Turism Hotelur  vs.  TRANSILVANIA LEASING SI

Turism Hotelur

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turism Hotelur are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Turism Hotelur may actually be approaching a critical reversion point that can send shares even higher in January 2025.

TRANSILVANIA LEASING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRANSILVANIA LEASING SI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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 Turism Hotelur and TRANSILVANIA LEASING

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

The idea behind Turism Hotelur and TRANSILVANIA LEASING SI 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.