Correlation Between CTS Eventim and Rai Way
Can any of the company-specific risk be diversified away by investing in both CTS Eventim and Rai Way 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 CTS Eventim and Rai Way into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTS Eventim AG and Rai Way SpA, you can compare the effects of market volatilities on CTS Eventim and Rai Way 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 CTS Eventim with a short position of Rai Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTS Eventim and Rai Way.
Diversification Opportunities for CTS Eventim and Rai Way
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTS and Rai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CTS Eventim AG and Rai Way SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rai Way SpA and CTS Eventim 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 CTS Eventim AG are associated (or correlated) with Rai Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rai Way SpA has no effect on the direction of CTS Eventim i.e., CTS Eventim and Rai Way go up and down completely randomly.
Pair Corralation between CTS Eventim and Rai Way
Assuming the 90 days horizon CTS Eventim AG is expected to under-perform the Rai Way. In addition to that, CTS Eventim is 2.03 times more volatile than Rai Way SpA. It trades about -0.23 of its total potential returns per unit of risk. Rai Way SpA is currently generating about -0.1 per unit of volatility. If you would invest 530.00 in Rai Way SpA on August 31, 2024 and sell it today you would lose (19.00) from holding Rai Way SpA or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CTS Eventim AG vs. Rai Way SpA
Performance |
| Timeline |
| CTS Eventim AG |
| Rai Way SpA |
CTS Eventim and Rai Way Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTS Eventim and Rai Way
The main advantage of trading using opposite CTS Eventim and Rai Way positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS Eventim position performs unexpectedly, Rai Way 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 Rai Way will offset losses from the drop in Rai Way's long position.| CTS Eventim vs. Live Nation Entertainment | CTS Eventim vs. Fuji Media Holdings | CTS Eventim vs. Rai Way SpA | CTS Eventim vs. Superior Plus Corp |
| Rai Way vs. JJ SNACK FOODS | Rai Way vs. THAI BEVERAGE | Rai Way vs. Tyson Foods | Rai Way vs. Suntory Beverage Food |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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