Correlation Between Inbar Group and Queenco L

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

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

Diversification Opportunities for Inbar Group and Queenco L

0.79

Correlation Coefficient

Inbar Group  Queenco L

Poor diversification

The 3 months correlation between Inbar and Queenco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Inbar Group Finance and Queenco L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queenco L and Inbar Group 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 Inbar Group Finance are associated (or correlated) with Queenco L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queenco L has no effect on the direction of Inbar Group i.e., Inbar Group and Queenco L go up and down completely randomly.

Pair Corralation between Inbar Group and Queenco L

Assuming the 90 days trading horizon Inbar Group is expected to generate 2.87 times less return on investment than Queenco L. But when comparing it to its historical volatility, Inbar Group Finance is 2.48 times less risky than Queenco L. It trades about 0.37 of its potential returns per unit of risk. Queenco L is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest  43,690  in Queenco L on September 29, 2024 and sell it today you would earn a total of  30,800  from holding Queenco L or generate 70.5% return on investment over 90 days.

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

Inbar Group Finance  vs.  Queenco L

Inbar Group Finance

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Inbar Group Finance are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inbar Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Queenco L

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Queenco L are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Queenco L sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inbar Group and Queenco L

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

The idea behind Inbar Group Finance and Queenco L 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.