Correlation Between RATH Aktiengesellscha and CA Immobilien
Can any of the company-specific risk be diversified away by investing in both RATH Aktiengesellscha and CA Immobilien 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 CA Immobilien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RATH Aktiengesellschaft and CA Immobilien Anlagen, you can compare the effects of market volatilities on RATH Aktiengesellscha and CA Immobilien 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 CA Immobilien. Check out your portfolio center. Please also check ongoing floating volatility patterns of RATH Aktiengesellscha and CA Immobilien.
Diversification Opportunities for RATH Aktiengesellscha and CA Immobilien
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RATH and CAI is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding RATH Aktiengesellschaft and CA Immobilien Anlagen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CA Immobilien Anlagen 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 CA Immobilien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CA Immobilien Anlagen has no effect on the direction of RATH Aktiengesellscha i.e., RATH Aktiengesellscha and CA Immobilien go up and down completely randomly.
Pair Corralation between RATH Aktiengesellscha and CA Immobilien
Assuming the 90 days trading horizon RATH Aktiengesellschaft is expected to generate 0.35 times more return on investment than CA Immobilien. However, RATH Aktiengesellschaft is 2.9 times less risky than CA Immobilien. It trades about -0.13 of its potential returns per unit of risk. CA Immobilien Anlagen is currently generating about -0.08 per unit of risk. If you would invest 2,880 in RATH Aktiengesellschaft on August 29, 2024 and sell it today you would lose (380.00) from holding RATH Aktiengesellschaft or give up 13.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RATH Aktiengesellschaft vs. CA Immobilien Anlagen
Performance |
| Timeline |
| RATH Aktiengesellschaft |
| CA Immobilien Anlagen |
RATH Aktiengesellscha and CA Immobilien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RATH Aktiengesellscha and CA Immobilien
The main advantage of trading using opposite RATH Aktiengesellscha and CA Immobilien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RATH Aktiengesellscha position performs unexpectedly, CA Immobilien 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 CA Immobilien will offset losses from the drop in CA Immobilien'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 |
| CA Immobilien vs. S IMMO AG | CA Immobilien vs. RATH Aktiengesellschaft | CA Immobilien vs. AT S Austria | CA Immobilien vs. BAWAG Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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