Correlation Between WESANA HEALTH and Rheinmetall
Can any of the company-specific risk be diversified away by investing in both WESANA HEALTH 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 WESANA HEALTH and Rheinmetall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WESANA HEALTH HOLD and Rheinmetall AG, you can compare the effects of market volatilities on WESANA HEALTH 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 WESANA HEALTH with a short position of Rheinmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESANA HEALTH and Rheinmetall.
Diversification Opportunities for WESANA HEALTH and Rheinmetall
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WESANA and Rheinmetall is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding WESANA HEALTH HOLD and Rheinmetall AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rheinmetall AG and WESANA HEALTH 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 WESANA HEALTH HOLD 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 WESANA HEALTH i.e., WESANA HEALTH and Rheinmetall go up and down completely randomly.
Pair Corralation between WESANA HEALTH and Rheinmetall
If you would invest 62,400 in Rheinmetall AG on October 12, 2024 and sell it today you would earn a total of 2,640 from holding Rheinmetall AG or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
WESANA HEALTH HOLD vs. Rheinmetall AG
Performance |
| Timeline |
| WESANA HEALTH HOLD |
| Rheinmetall AG |
WESANA HEALTH and Rheinmetall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESANA HEALTH and Rheinmetall
The main advantage of trading using opposite WESANA HEALTH and Rheinmetall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESANA HEALTH 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.| WESANA HEALTH vs. Comba Telecom Systems | WESANA HEALTH vs. Entravision Communications | WESANA HEALTH vs. T MOBILE US | WESANA HEALTH vs. Iridium Communications |
| Rheinmetall vs. Garofalo Health Care | Rheinmetall vs. WESANA HEALTH HOLD | Rheinmetall vs. PREMIER FOODS | Rheinmetall vs. Cal Maine Foods |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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