Correlation Between Institut IGH and Atlantic Grupa

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

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

Diversification Opportunities for Institut IGH and Atlantic Grupa

0.34

Correlation Coefficient

Institut IGH  Atlantic Grupa

Weak diversification

The 3 months correlation between Institut and Atlantic is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Institut IGH dd and Atlantic Grupa dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Grupa dd and Institut IGH 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 Institut IGH dd are associated (or correlated) with Atlantic Grupa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Grupa dd has no effect on the direction of Institut IGH i.e., Institut IGH and Atlantic Grupa go up and down completely randomly.

Pair Corralation between Institut IGH and Atlantic Grupa

Assuming the 90 days trading horizon Institut IGH dd is expected to under-perform the Atlantic Grupa. In addition to that, Institut IGH is 5.82 times more volatile than Atlantic Grupa dd. It trades about -0.06 of its total potential returns per unit of risk. Atlantic Grupa dd is currently generating about 0.02 per unit of volatility. If you would invest  5,150  in Atlantic Grupa dd on September 5, 2024 and sell it today you would earn a total of  50.00  from holding Atlantic Grupa dd or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	52.73%
Values	Daily Returns

Institut IGH dd  vs.  Atlantic Grupa dd

Institut IGH dd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Institut IGH dd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Atlantic Grupa dd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Grupa dd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Atlantic Grupa is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Institut IGH and Atlantic Grupa

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

The idea behind Institut IGH dd and Atlantic Grupa dd 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.