Correlation Between REVO INSURANCE and HomeToGo
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE and HomeToGo 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 REVO INSURANCE and HomeToGo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and HomeToGo SE, you can compare the effects of market volatilities on REVO INSURANCE and HomeToGo 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 REVO INSURANCE with a short position of HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and HomeToGo.
Diversification Opportunities for REVO INSURANCE and HomeToGo
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REVO and HomeToGo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE and REVO INSURANCE 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 REVO INSURANCE SPA are associated (or correlated) with HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of REVO INSURANCE i.e., REVO INSURANCE and HomeToGo go up and down completely randomly.
Pair Corralation between REVO INSURANCE and HomeToGo
Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 0.38 times more return on investment than HomeToGo. However, REVO INSURANCE SPA is 2.62 times less risky than HomeToGo. It trades about 0.06 of its potential returns per unit of risk. HomeToGo SE is currently generating about -0.01 per unit of risk. If you would invest 861.00 in REVO INSURANCE SPA on August 31, 2024 and sell it today you would earn a total of 219.00 from holding REVO INSURANCE SPA or generate 25.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. HomeToGo SE
Performance |
| Timeline |
| REVO INSURANCE SPA |
| HomeToGo SE |
REVO INSURANCE and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and HomeToGo
The main advantage of trading using opposite REVO INSURANCE and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| REVO INSURANCE vs. Wizz Air Holdings | REVO INSURANCE vs. T MOBILE US | REVO INSURANCE vs. MTI WIRELESS EDGE | REVO INSURANCE vs. Scandinavian Tobacco Group |
| HomeToGo vs. Charter Communications | HomeToGo vs. INTER CARS SA | HomeToGo vs. MYFAIR GOLD P | HomeToGo vs. Enter Air SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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