Correlation Between 2G ENERGY and RTL GROUP
Can any of the company-specific risk be diversified away by investing in both 2G ENERGY and RTL GROUP 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 2G ENERGY and RTL GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2G ENERGY and RTL GROUP UNSPADR, you can compare the effects of market volatilities on 2G ENERGY and RTL GROUP 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 2G ENERGY with a short position of RTL GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2G ENERGY and RTL GROUP.
Diversification Opportunities for 2G ENERGY and RTL GROUP
Good diversification
The 3 months correlation between 2GB and RTL is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding 2G ENERGY and RTL GROUP UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL GROUP UNSPADR and 2G ENERGY 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 2G ENERGY are associated (or correlated) with RTL GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL GROUP UNSPADR has no effect on the direction of 2G ENERGY i.e., 2G ENERGY and RTL GROUP go up and down completely randomly.
Pair Corralation between 2G ENERGY and RTL GROUP
Assuming the 90 days trading horizon 2G ENERGY is expected to generate 0.78 times more return on investment than RTL GROUP. However, 2G ENERGY is 1.28 times less risky than RTL GROUP. It trades about 0.01 of its potential returns per unit of risk. RTL GROUP UNSPADR is currently generating about -0.2 per unit of risk. If you would invest 2,195 in 2G ENERGY on September 1, 2024 and sell it today you would earn a total of 0.00 from holding 2G ENERGY or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
2G ENERGY vs. RTL GROUP UNSPADR
Performance |
| Timeline |
| 2G ENERGY |
| RTL GROUP UNSPADR |
2G ENERGY and RTL GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2G ENERGY and RTL GROUP
The main advantage of trading using opposite 2G ENERGY and RTL GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2G ENERGY position performs unexpectedly, RTL GROUP 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 RTL GROUP will offset losses from the drop in RTL GROUP's long position.| 2G ENERGY vs. Australian Agricultural | 2G ENERGY vs. Ultra Clean Holdings | 2G ENERGY vs. Charter Communications | 2G ENERGY vs. Consolidated Communications Holdings |
| RTL GROUP vs. WIZZ AIR HLDGUNSPADR4 | RTL GROUP vs. Taiwan Semiconductor Manufacturing | RTL GROUP vs. GEAR4MUSIC LS 10 | RTL GROUP vs. Ryanair Holdings plc |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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