Correlation Between RB Global and Discount Print
Can any of the company-specific risk be diversified away by investing in both RB Global and Discount Print 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 RB Global and Discount Print into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RB Global and Discount Print USA, you can compare the effects of market volatilities on RB Global and Discount Print 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 RB Global with a short position of Discount Print. Check out your portfolio center. Please also check ongoing floating volatility patterns of RB Global and Discount Print.
Diversification Opportunities for RB Global and Discount Print
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RBA and Discount is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding RB Global and Discount Print USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discount Print USA and RB Global 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 RB Global are associated (or correlated) with Discount Print. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discount Print USA has no effect on the direction of RB Global i.e., RB Global and Discount Print go up and down completely randomly.
Pair Corralation between RB Global and Discount Print
Considering the 90-day investment horizon RB Global is expected to generate 156.95 times less return on investment than Discount Print. But when comparing it to its historical volatility, RB Global is 33.34 times less risky than Discount Print. It trades about 0.05 of its potential returns per unit of risk. Discount Print USA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Discount Print USA on November 1, 2024 and sell it today you would earn a total of 0.01 from holding Discount Print USA or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
RB Global vs. Discount Print USA
Performance |
| Timeline |
| RB Global |
| Discount Print USA |
RB Global and Discount Print Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RB Global and Discount Print
The main advantage of trading using opposite RB Global and Discount Print positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RB Global position performs unexpectedly, Discount Print 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 Discount Print will offset losses from the drop in Discount Print's long position.The idea behind RB Global and Discount Print USA 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.| Discount Print vs. Cintas | Discount Print vs. Thomson Reuters Corp | Discount Print vs. Global Payments | Discount Print vs. Wolters Kluwer NV |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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