Correlation Between Rheinmetall and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both Rheinmetall and Safestore Holdings 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 Safestore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and Safestore Holdings plc, you can compare the effects of market volatilities on Rheinmetall and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and Safestore Holdings.
Diversification Opportunities for Rheinmetall and Safestore Holdings
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rheinmetall and Safestore is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of Rheinmetall i.e., Rheinmetall and Safestore Holdings go up and down completely randomly.
Pair Corralation between Rheinmetall and Safestore Holdings
Assuming the 90 days trading horizon Rheinmetall AG is expected to generate 0.7 times more return on investment than Safestore Holdings. However, Rheinmetall AG is 1.43 times less risky than Safestore Holdings. It trades about 0.26 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.19 per unit of risk. If you would invest 61,580 in Rheinmetall AG on October 28, 2024 and sell it today you would earn a total of 11,820 from holding Rheinmetall AG or generate 19.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rheinmetall AG vs. Safestore Holdings plc
Performance |
| Timeline |
| Rheinmetall AG |
| Safestore Holdings plc |
Rheinmetall and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and Safestore Holdings
The main advantage of trading using opposite Rheinmetall and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| Rheinmetall vs. Hisense Home Appliances | Rheinmetall vs. Infrastrutture Wireless Italiane | Rheinmetall vs. CITY OFFICE REIT | Rheinmetall vs. Corporate Office Properties |
| Safestore Holdings vs. Lyxor 1 | Safestore Holdings vs. Xtrackers LevDAX | Safestore Holdings vs. Xtrackers ShortDAX | Safestore Holdings vs. Superior Plus Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |