Correlation Between Indstrias Romi and Springs Global

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

By analyzing existing cross correlation between Indstrias Romi SA and Springs Global Participaes, you can compare the effects of market volatilities on Indstrias Romi and Springs Global 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 Indstrias Romi with a short position of Springs Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indstrias Romi and Springs Global.

Diversification Opportunities for Indstrias Romi and Springs Global

0.0

Correlation Coefficient

Indstrias Romi  Springs Global

Pay attention - limited upside

The 3 months correlation between Indstrias and Springs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indstrias Romi SA and Springs Global Participaes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Springs Global Parti and Indstrias Romi 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 Indstrias Romi SA are associated (or correlated) with Springs Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Springs Global Parti has no effect on the direction of Indstrias Romi i.e., Indstrias Romi and Springs Global go up and down completely randomly.

Pair Corralation between Indstrias Romi and Springs Global

If you would invest  164.00  in Springs Global Participaes on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Springs Global Participaes or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Indstrias Romi SA  vs.  Springs Global Participaes

Indstrias Romi SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indstrias Romi SA 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 basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Springs Global Parti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Springs Global Participaes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Springs Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Indstrias Romi and Springs Global

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

The idea behind Indstrias Romi SA and Springs Global Participaes 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.