Correlation Between Inbar Group and Alrov Properties
Can any of the company-specific risk be diversified away by investing in both Inbar Group and Alrov Properties 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 Alrov Properties 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 Alrov Properties Lodgings, you can compare the effects of market volatilities on Inbar Group and Alrov Properties 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 Alrov Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inbar Group and Alrov Properties.
Diversification Opportunities for Inbar Group and Alrov Properties
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inbar and Alrov is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Inbar Group Finance and Alrov Properties Lodgings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alrov Properties Lodgings 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 Alrov Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alrov Properties Lodgings has no effect on the direction of Inbar Group i.e., Inbar Group and Alrov Properties go up and down completely randomly.
Pair Corralation between Inbar Group and Alrov Properties
Assuming the 90 days trading horizon Inbar Group Finance is expected to under-perform the Alrov Properties. In addition to that, Inbar Group is 2.87 times more volatile than Alrov Properties Lodgings. It trades about -0.46 of its total potential returns per unit of risk. Alrov Properties Lodgings is currently generating about -0.15 per unit of volatility. If you would invest 1,549,000 in Alrov Properties Lodgings on January 26, 2024 and sell it today you would lose (90,000) from holding Alrov Properties Lodgings or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Inbar Group Finance vs. Alrov Properties Lodgings
Performance |
| Timeline |
| Inbar Group Finance |
| Alrov Properties Lodgings |
Inbar Group and Alrov Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inbar Group and Alrov Properties
The main advantage of trading using opposite Inbar Group and Alrov Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inbar Group position performs unexpectedly, Alrov Properties 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 Alrov Properties will offset losses from the drop in Alrov Properties' long position.The idea behind Inbar Group Finance and Alrov Properties Lodgings 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.| Alrov Properties vs. Melisron | Alrov Properties vs. Fattal 1998 Holdings | Alrov Properties vs. Azrieli Group | Alrov Properties vs. Clal Insurance Enterprises |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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