Correlation Between TRANSILVANIA LEASING and IM Vinaria

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

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

Diversification Opportunities for TRANSILVANIA LEASING and IM Vinaria

0.52

Correlation Coefficient

TRANSILVANIA LEASING  IM Vinaria

Very weak diversification

The 3 months correlation between TRANSILVANIA and WINE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding TRANSILVANIA LEASING SI and IM Vinaria Purcari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IM Vinaria Purcari and TRANSILVANIA LEASING 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 TRANSILVANIA LEASING SI are associated (or correlated) with IM Vinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IM Vinaria Purcari has no effect on the direction of TRANSILVANIA LEASING i.e., TRANSILVANIA LEASING and IM Vinaria go up and down completely randomly.

Pair Corralation between TRANSILVANIA LEASING and IM Vinaria

Assuming the 90 days trading horizon TRANSILVANIA LEASING SI is expected to generate 2.57 times more return on investment than IM Vinaria. However, TRANSILVANIA LEASING is 2.57 times more volatile than IM Vinaria Purcari. It trades about 0.04 of its potential returns per unit of risk. IM Vinaria Purcari is currently generating about 0.03 per unit of risk. If you would invest  6.38  in TRANSILVANIA LEASING SI on September 14, 2024 and sell it today you would earn a total of  1.62  from holding TRANSILVANIA LEASING SI or generate 25.39% return on investment over 90 days.

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

TRANSILVANIA LEASING SI  vs.  IM Vinaria Purcari

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.

IM Vinaria Purcari

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IM Vinaria Purcari are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IM Vinaria is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TRANSILVANIA LEASING and IM Vinaria

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

The idea behind TRANSILVANIA LEASING SI and IM Vinaria Purcari 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 Stocks Directory module to find actively traded stocks across global markets.