Correlation Between Biztech Konsulting and RAFAKO SA
Can any of the company-specific risk be diversified away by investing in both Biztech Konsulting and RAFAKO SA 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 Biztech Konsulting and RAFAKO SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biztech Konsulting SA and RAFAKO SA, you can compare the effects of market volatilities on Biztech Konsulting and RAFAKO SA 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 Biztech Konsulting with a short position of RAFAKO SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biztech Konsulting and RAFAKO SA.
Diversification Opportunities for Biztech Konsulting and RAFAKO SA
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biztech and RAFAKO is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Biztech Konsulting SA and RAFAKO SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RAFAKO SA and Biztech Konsulting 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 Biztech Konsulting SA are associated (or correlated) with RAFAKO SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RAFAKO SA has no effect on the direction of Biztech Konsulting i.e., Biztech Konsulting and RAFAKO SA go up and down completely randomly.
Pair Corralation between Biztech Konsulting and RAFAKO SA
Assuming the 90 days trading horizon Biztech Konsulting SA is expected to generate 0.65 times more return on investment than RAFAKO SA. However, Biztech Konsulting SA is 1.55 times less risky than RAFAKO SA. It trades about 0.09 of its potential returns per unit of risk. RAFAKO SA is currently generating about -0.18 per unit of risk. If you would invest 14.00 in Biztech Konsulting SA on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Biztech Konsulting SA or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.63% |
| Values | Daily Returns |
Biztech Konsulting SA vs. RAFAKO SA
Performance |
| Timeline |
| Biztech Konsulting |
| RAFAKO SA |
Biztech Konsulting and RAFAKO SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biztech Konsulting and RAFAKO SA
The main advantage of trading using opposite Biztech Konsulting and RAFAKO SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biztech Konsulting position performs unexpectedly, RAFAKO SA 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 RAFAKO SA will offset losses from the drop in RAFAKO SA's long position.| Biztech Konsulting vs. Clean Carbon Energy | Biztech Konsulting vs. ADX | Biztech Konsulting vs. Agroliga Group PLC | Biztech Konsulting vs. Vee SA |
| RAFAKO SA vs. Banco Santander SA | RAFAKO SA vs. UniCredit SpA | RAFAKO SA vs. CEZ as | RAFAKO SA vs. Polski Koncern Naftowy |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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