Correlation Between 3R Petroleum and Infracommerce CXaaS

Can any of the company-specific risk be diversified away by investing in both 3R Petroleum and Infracommerce CXaaS 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 3R Petroleum and Infracommerce CXaaS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3R Petroleum leo and Infracommerce CXaaS SA, you can compare the effects of market volatilities on 3R Petroleum and Infracommerce CXaaS 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 3R Petroleum with a short position of Infracommerce CXaaS. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3R Petroleum and Infracommerce CXaaS.

Diversification Opportunities for 3R Petroleum and Infracommerce CXaaS

0.58

Correlation Coefficient

3R Petroleum  Infracommerce CXaaS

Very weak diversification

The 3 months correlation between RRRP3 and Infracommerce is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding 3R Petroleum leo and Infracommerce CXaaS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infracommerce CXaaS and 3R Petroleum 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 3R Petroleum leo are associated (or correlated) with Infracommerce CXaaS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infracommerce CXaaS has no effect on the direction of 3R Petroleum i.e., 3R Petroleum and Infracommerce CXaaS go up and down completely randomly.

Pair Corralation between 3R Petroleum and Infracommerce CXaaS

Assuming the 90 days trading horizon 3R Petroleum leo is expected to under-perform the Infracommerce CXaaS. But the stock apears to be less risky and, when comparing its historical volatility, 3R Petroleum leo is 2.2 times less risky than Infracommerce CXaaS. The stock trades about -0.24 of its potential returns per unit of risk. The Infracommerce CXaaS SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Infracommerce CXaaS SA on September 5, 2024 and sell it today you would lose (5.00) from holding Infracommerce CXaaS SA or give up 35.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	76.19%
Values	Daily Returns

3R Petroleum leo  vs.  Infracommerce CXaaS SA

3R Petroleum leo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 3R Petroleum leo 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Infracommerce CXaaS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infracommerce CXaaS 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with 3R Petroleum and Infracommerce CXaaS

The main advantage of trading using opposite 3R Petroleum and Infracommerce CXaaS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3R Petroleum position performs unexpectedly, Infracommerce CXaaS 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 Infracommerce CXaaS will offset losses from the drop in Infracommerce CXaaS's long position.

The idea behind 3R Petroleum leo and Infracommerce CXaaS SA 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.