Correlation Between 1 KIWIBANK and 35 RABOBANK
Can any of the company-specific risk be diversified away by investing in both 1 KIWIBANK and 35 RABOBANK 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 1 KIWIBANK and 35 RABOBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1 KIWIBANK 20 and 35 RABOBANK 23, you can compare the effects of market volatilities on 1 KIWIBANK and 35 RABOBANK 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 1 KIWIBANK with a short position of 35 RABOBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1 KIWIBANK and 35 RABOBANK.
Diversification Opportunities for 1 KIWIBANK and 35 RABOBANK
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KIW13 and RBK072 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 1 KIWIBANK 20 and 35 RABOBANK 23 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 35 RABOBANK 23 and 1 KIWIBANK 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 1 KIWIBANK 20 are associated (or correlated) with 35 RABOBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 35 RABOBANK 23 has no effect on the direction of 1 KIWIBANK i.e., 1 KIWIBANK and 35 RABOBANK go up and down completely randomly.
Pair Corralation between 1 KIWIBANK and 35 RABOBANK
If you would invest (100.00) in 35 RABOBANK 23 on September 19, 2024 and sell it today you would earn a total of 100.00 from holding 35 RABOBANK 23 or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1 KIWIBANK 20 vs. 35 RABOBANK 23
Performance |
| Timeline |
| 1 KIWIBANK 20 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| 35 RABOBANK 23 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
1 KIWIBANK and 35 RABOBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1 KIWIBANK and 35 RABOBANK
The main advantage of trading using opposite 1 KIWIBANK and 35 RABOBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1 KIWIBANK position performs unexpectedly, 35 RABOBANK 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 35 RABOBANK will offset losses from the drop in 35 RABOBANK's long position.The idea behind 1 KIWIBANK 20 and 35 RABOBANK 23 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |