Correlation Between Intergroup and Vitania

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Can any of the company-specific risk be diversified away by investing in both Intergroup and Vitania 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 Intergroup and Vitania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Intergroup and Vitania, you can compare the effects of market volatilities on Intergroup and Vitania 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 Intergroup with a short position of Vitania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intergroup and Vitania.

Diversification Opportunities for Intergroup and Vitania

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Intergroup and Vitania is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Intergroup and Vitania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitania and Intergroup 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 The Intergroup are associated (or correlated) with Vitania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitania has no effect on the direction of Intergroup i.e., Intergroup and Vitania go up and down completely randomly.

Pair Corralation between Intergroup and Vitania

Given the investment horizon of 90 days The Intergroup is expected to under-perform the Vitania. In addition to that, Intergroup is 2.49 times more volatile than Vitania. It trades about -0.02 of its total potential returns per unit of risk. Vitania is currently generating about -0.03 per unit of volatility. If you would invest  205,900  in Vitania on December 30, 2023 and sell it today you would lose (3,400) from holding Vitania or give up 1.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy86.36%
ValuesDaily Returns

The Intergroup  vs.  Vitania

 Performance 
       Timeline  
Intergroup 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in The Intergroup are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Intergroup reported solid returns over the last few months and may actually be approaching a breakup point.
Vitania 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Vitania has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Vitania is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intergroup and Vitania Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intergroup and Vitania

The main advantage of trading using opposite Intergroup and Vitania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intergroup position performs unexpectedly, Vitania 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 Vitania will offset losses from the drop in Vitania's long position.
The idea behind The Intergroup and Vitania 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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