Correlation Between Rheinmetall and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both Rheinmetall and EVS Broadcast 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 Rheinmetall and EVS Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and EVS Broadcast Equipment, you can compare the effects of market volatilities on Rheinmetall and EVS Broadcast 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 Rheinmetall with a short position of EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and EVS Broadcast.
Diversification Opportunities for Rheinmetall and EVS Broadcast
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rheinmetall and EVS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment and Rheinmetall 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 Rheinmetall AG are associated (or correlated) with EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of Rheinmetall i.e., Rheinmetall and EVS Broadcast go up and down completely randomly.
Pair Corralation between Rheinmetall and EVS Broadcast
Assuming the 90 days trading horizon Rheinmetall AG is expected to generate 1.38 times more return on investment than EVS Broadcast. However, Rheinmetall is 1.38 times more volatile than EVS Broadcast Equipment. It trades about 0.12 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.06 per unit of risk. If you would invest 21,618 in Rheinmetall AG on October 13, 2024 and sell it today you would earn a total of 43,422 from holding Rheinmetall AG or generate 200.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.2% |
| Values | Daily Returns |
Rheinmetall AG vs. EVS Broadcast Equipment
Performance |
| Timeline |
| Rheinmetall AG |
| EVS Broadcast Equipment |
Rheinmetall and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and EVS Broadcast
The main advantage of trading using opposite Rheinmetall and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| Rheinmetall vs. Blackrock World Mining | Rheinmetall vs. Intermediate Capital Group | Rheinmetall vs. Atalaya Mining | Rheinmetall vs. AcadeMedia AB |
| EVS Broadcast vs. Allianz Technology Trust | EVS Broadcast vs. Coeur Mining | EVS Broadcast vs. Monster Beverage Corp | EVS Broadcast vs. Polar Capital Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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