Correlation Between RATH Aktiengesellscha and BKS Bank
Can any of the company-specific risk be diversified away by investing in both RATH Aktiengesellscha and BKS Bank 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 RATH Aktiengesellscha and BKS Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RATH Aktiengesellschaft and BKS Bank AG, you can compare the effects of market volatilities on RATH Aktiengesellscha and BKS Bank 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 RATH Aktiengesellscha with a short position of BKS Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of RATH Aktiengesellscha and BKS Bank.
Diversification Opportunities for RATH Aktiengesellscha and BKS Bank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RATH and BKS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding RATH Aktiengesellschaft and BKS Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKS Bank AG and RATH Aktiengesellscha 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 RATH Aktiengesellschaft are associated (or correlated) with BKS Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKS Bank AG has no effect on the direction of RATH Aktiengesellscha i.e., RATH Aktiengesellscha and BKS Bank go up and down completely randomly.
Pair Corralation between RATH Aktiengesellscha and BKS Bank
Assuming the 90 days trading horizon RATH Aktiengesellschaft is expected to generate 0.98 times more return on investment than BKS Bank. However, RATH Aktiengesellschaft is 1.02 times less risky than BKS Bank. It trades about 0.0 of its potential returns per unit of risk. BKS Bank AG is currently generating about -0.12 per unit of risk. If you would invest 2,500 in RATH Aktiengesellschaft on August 30, 2024 and sell it today you would earn a total of 0.00 from holding RATH Aktiengesellschaft or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RATH Aktiengesellschaft vs. BKS Bank AG
Performance |
| Timeline |
| RATH Aktiengesellschaft |
| BKS Bank AG |
RATH Aktiengesellscha and BKS Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RATH Aktiengesellscha and BKS Bank
The main advantage of trading using opposite RATH Aktiengesellscha and BKS Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RATH Aktiengesellscha position performs unexpectedly, BKS Bank 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 BKS Bank will offset losses from the drop in BKS Bank's long position.| RATH Aktiengesellscha vs. UNIQA Insurance Group | RATH Aktiengesellscha vs. AMAG Austria Metall | RATH Aktiengesellscha vs. Universal Music Group | RATH Aktiengesellscha vs. Raiffeisen Bank International |
| BKS Bank vs. RATH Aktiengesellschaft | BKS Bank vs. AT S Austria | BKS Bank vs. BAWAG Group AG | BKS Bank vs. Semperit Aktiengesellschaft Holding |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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