Correlation Between Intergama and Azorim Investment

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

By analyzing existing cross correlation between Intergama and Azorim Investment Development, you can compare the effects of market volatilities on Intergama and Azorim Investment 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 Intergama with a short position of Azorim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intergama and Azorim Investment.

Diversification Opportunities for Intergama and Azorim Investment

0.7

Correlation Coefficient

Intergama  Azorim Investment

Poor diversification

The 3 months correlation between Intergama and Azorim is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Intergama and Azorim Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azorim Investment and Intergama 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 Intergama are associated (or correlated) with Azorim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azorim Investment has no effect on the direction of Intergama i.e., Intergama and Azorim Investment go up and down completely randomly.

Pair Corralation between Intergama and Azorim Investment

If you would invest  594,700  in Intergama on February 2, 2024 and sell it today you would earn a total of  0.00  from holding Intergama or generate 0.0% return on investment over 90 days.

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

Intergama  vs.  Azorim Investment Development

Intergama

Risk-Adjusted Performance

0 of 100

Insignificant

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

Azorim Investment

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Azorim Investment Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Azorim Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intergama and Azorim Investment

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

The idea behind Intergama and Azorim Investment Development 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.