Correlation Between Rheinmetall and GB Group
Can any of the company-specific risk be diversified away by investing in both Rheinmetall and GB Group 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 Rheinmetall and GB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and GB Group plc, you can compare the effects of market volatilities on Rheinmetall and GB Group 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 Rheinmetall with a short position of GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and GB Group.
Diversification Opportunities for Rheinmetall and GB Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rheinmetall and 0GB is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc and Rheinmetall 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 Rheinmetall AG are associated (or correlated) with GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of Rheinmetall i.e., Rheinmetall and GB Group go up and down completely randomly.
Pair Corralation between Rheinmetall and GB Group
Assuming the 90 days trading horizon Rheinmetall AG is expected to generate 0.78 times more return on investment than GB Group. However, Rheinmetall AG is 1.29 times less risky than GB Group. It trades about 0.13 of its potential returns per unit of risk. GB Group plc is currently generating about 0.04 per unit of risk. If you would invest 25,869 in Rheinmetall AG on November 3, 2024 and sell it today you would earn a total of 49,691 from holding Rheinmetall AG or generate 192.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Rheinmetall AG vs. GB Group plc
Performance |
| Timeline |
| Rheinmetall AG |
| GB Group plc |
Rheinmetall and GB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and GB Group
The main advantage of trading using opposite Rheinmetall and GB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall position performs unexpectedly, GB Group 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 GB Group will offset losses from the drop in GB Group's long position.| Rheinmetall vs. Peijia Medical Limited | Rheinmetall vs. VIVA WINE GROUP | Rheinmetall vs. CHINA TONTINE WINES | Rheinmetall vs. CVR Medical Corp |
| GB Group vs. PULSION Medical Systems | GB Group vs. CLOVER HEALTH INV | GB Group vs. PEPTONIC MEDICAL | GB Group vs. Peijia Medical Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |