Correlation Between Biofarm Bucure and Rompetrol Rafi
Can any of the company-specific risk be diversified away by investing in both Biofarm Bucure and Rompetrol Rafi 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 Biofarm Bucure and Rompetrol Rafi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biofarm Bucure and Rompetrol Rafi, you can compare the effects of market volatilities on Biofarm Bucure and Rompetrol Rafi 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 Biofarm Bucure with a short position of Rompetrol Rafi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofarm Bucure and Rompetrol Rafi.
Diversification Opportunities for Biofarm Bucure and Rompetrol Rafi
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Biofarm and Rompetrol is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Biofarm Bucure and Rompetrol Rafi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rompetrol Rafi and Biofarm Bucure 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 Biofarm Bucure are associated (or correlated) with Rompetrol Rafi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rompetrol Rafi has no effect on the direction of Biofarm Bucure i.e., Biofarm Bucure and Rompetrol Rafi go up and down completely randomly.
Pair Corralation between Biofarm Bucure and Rompetrol Rafi
Assuming the 90 days trading horizon Biofarm Bucure is expected to generate 0.45 times more return on investment than Rompetrol Rafi. However, Biofarm Bucure is 2.2 times less risky than Rompetrol Rafi. It trades about 0.0 of its potential returns per unit of risk. Rompetrol Rafi is currently generating about -0.2 per unit of risk. If you would invest 75.00 in Biofarm Bucure on August 23, 2024 and sell it today you would earn a total of 0.00 from holding Biofarm Bucure 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 |
Biofarm Bucure vs. Rompetrol Rafi
Performance |
| Timeline |
| Biofarm Bucure |
| Rompetrol Rafi |
Biofarm Bucure and Rompetrol Rafi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biofarm Bucure and Rompetrol Rafi
The main advantage of trading using opposite Biofarm Bucure and Rompetrol Rafi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofarm Bucure position performs unexpectedly, Rompetrol Rafi 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 Rompetrol Rafi will offset losses from the drop in Rompetrol Rafi's long position.| Biofarm Bucure vs. Safetech Innovations SA | Biofarm Bucure vs. Digi Communications NV | Biofarm Bucure vs. TRANSILVANIA INVESTMENTS ALLIANCE | Biofarm Bucure vs. Patria Bank SA |
| Rompetrol Rafi vs. Safetech Innovations SA | Rompetrol Rafi vs. AROBS TRANSILVANIA SOFTWARE | Rompetrol Rafi vs. TRANSILVANIA INVESTMENTS ALLIANCE | Rompetrol Rafi vs. Biofarm Bucure |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |