Correlation Between La Franaise and RATH Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both La Franaise and RATH Aktiengesellscha 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 La Franaise and RATH Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between La Franaise des and RATH Aktiengesellschaft, you can compare the effects of market volatilities on La Franaise and RATH Aktiengesellscha 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 La Franaise with a short position of RATH Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of La Franaise and RATH Aktiengesellscha.
Diversification Opportunities for La Franaise and RATH Aktiengesellscha
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FDJ and RATH is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding La Franaise des and RATH Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATH Aktiengesellschaft and La Franaise 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 La Franaise des are associated (or correlated) with RATH Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATH Aktiengesellschaft has no effect on the direction of La Franaise i.e., La Franaise and RATH Aktiengesellscha go up and down completely randomly.
Pair Corralation between La Franaise and RATH Aktiengesellscha
Assuming the 90 days trading horizon La Franaise des is expected to generate 3.32 times more return on investment than RATH Aktiengesellscha. However, La Franaise is 3.32 times more volatile than RATH Aktiengesellschaft. It trades about 0.09 of its potential returns per unit of risk. RATH Aktiengesellschaft is currently generating about 0.0 per unit of risk. If you would invest 3,690 in La Franaise des on August 24, 2024 and sell it today you would earn a total of 116.00 from holding La Franaise des or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
La Franaise des vs. RATH Aktiengesellschaft
Performance |
| Timeline |
| La Franaise des |
| RATH Aktiengesellschaft |
La Franaise and RATH Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with La Franaise and RATH Aktiengesellscha
The main advantage of trading using opposite La Franaise and RATH Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if La Franaise position performs unexpectedly, RATH Aktiengesellscha 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 RATH Aktiengesellscha will offset losses from the drop in RATH Aktiengesellscha's long position.| La Franaise vs. AT S Austria | La Franaise vs. BAWAG Group AG | La Franaise vs. Semperit Aktiengesellschaft Holding | La Franaise vs. Telekom Austria AG |
| RATH Aktiengesellscha vs. AT S Austria | RATH Aktiengesellscha vs. BAWAG Group AG | RATH Aktiengesellscha vs. Semperit Aktiengesellschaft Holding | RATH Aktiengesellscha vs. Telekom Austria AG |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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