Correlation Between Rheinmetall and CTT -
Can any of the company-specific risk be diversified away by investing in both Rheinmetall and CTT - 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 CTT - into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and CTT Correios, you can compare the effects of market volatilities on Rheinmetall and CTT - 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 CTT -. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and CTT -.
Diversification Opportunities for Rheinmetall and CTT -
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rheinmetall and CTT is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and CTT Correios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTT Correios 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 CTT -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTT Correios has no effect on the direction of Rheinmetall i.e., Rheinmetall and CTT - go up and down completely randomly.
Pair Corralation between Rheinmetall and CTT -
Assuming the 90 days trading horizon Rheinmetall AG is expected to generate 1.17 times more return on investment than CTT -. However, Rheinmetall is 1.17 times more volatile than CTT Correios. It trades about 0.12 of its potential returns per unit of risk. CTT Correios is currently generating about 0.06 per unit of risk. If you would invest 21,695 in Rheinmetall AG on October 16, 2024 and sell it today you would earn a total of 42,765 from holding Rheinmetall AG or generate 197.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rheinmetall AG vs. CTT Correios
Performance |
| Timeline |
| Rheinmetall AG |
| CTT Correios |
Rheinmetall and CTT - Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and CTT -
The main advantage of trading using opposite Rheinmetall and CTT - positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall position performs unexpectedly, CTT - 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 CTT - will offset losses from the drop in CTT -'s long position.| Rheinmetall vs. ANTA SPORTS PRODUCT | Rheinmetall vs. RELIANCE STEEL AL | Rheinmetall vs. United States Steel | Rheinmetall vs. TOWNSQUARE MEDIA INC |
| CTT - vs. QBE Insurance Group | CTT - vs. China Reinsurance | CTT - vs. Tower Semiconductor | CTT - vs. Universal Insurance Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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