Correlation Between Atresmedia and Rheinmetall
Can any of the company-specific risk be diversified away by investing in both Atresmedia and Rheinmetall 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 Atresmedia and Rheinmetall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atresmedia and Rheinmetall AG, you can compare the effects of market volatilities on Atresmedia and Rheinmetall 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 Atresmedia with a short position of Rheinmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atresmedia and Rheinmetall.
Diversification Opportunities for Atresmedia and Rheinmetall
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Atresmedia and Rheinmetall is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Atresmedia and Rheinmetall AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rheinmetall AG and Atresmedia 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 Atresmedia are associated (or correlated) with Rheinmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rheinmetall AG has no effect on the direction of Atresmedia i.e., Atresmedia and Rheinmetall go up and down completely randomly.
Pair Corralation between Atresmedia and Rheinmetall
Assuming the 90 days trading horizon Atresmedia is expected to generate 30.75 times less return on investment than Rheinmetall. But when comparing it to its historical volatility, Atresmedia is 1.25 times less risky than Rheinmetall. It trades about 0.01 of its potential returns per unit of risk. Rheinmetall AG is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 60,577 in Rheinmetall AG on October 11, 2024 and sell it today you would earn a total of 4,283 from holding Rheinmetall AG or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atresmedia vs. Rheinmetall AG
Performance |
| Timeline |
| Atresmedia |
| Rheinmetall AG |
Atresmedia and Rheinmetall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atresmedia and Rheinmetall
The main advantage of trading using opposite Atresmedia and Rheinmetall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atresmedia position performs unexpectedly, Rheinmetall 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 Rheinmetall will offset losses from the drop in Rheinmetall's long position.| Atresmedia vs. Sligro Food Group | Atresmedia vs. Ashtead Technology Holdings | Atresmedia vs. Allianz Technology Trust | Atresmedia vs. Celebrus Technologies plc |
| Rheinmetall vs. Live Nation Entertainment | Rheinmetall vs. Atresmedia | Rheinmetall vs. Associated British Foods | Rheinmetall vs. Costco Wholesale Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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