Correlation Between Rheinmetall and ATOSS Software
Can any of the company-specific risk be diversified away by investing in both Rheinmetall and ATOSS Software 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 ATOSS Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and ATOSS Software SE, you can compare the effects of market volatilities on Rheinmetall and ATOSS Software 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 ATOSS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and ATOSS Software.
Diversification Opportunities for Rheinmetall and ATOSS Software
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rheinmetall and ATOSS is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and ATOSS Software SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATOSS Software SE 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 ATOSS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATOSS Software SE has no effect on the direction of Rheinmetall i.e., Rheinmetall and ATOSS Software go up and down completely randomly.
Pair Corralation between Rheinmetall and ATOSS Software
Assuming the 90 days horizon Rheinmetall AG is expected to generate 1.06 times more return on investment than ATOSS Software. However, Rheinmetall is 1.06 times more volatile than ATOSS Software SE. It trades about 0.13 of its potential returns per unit of risk. ATOSS Software SE is currently generating about 0.05 per unit of risk. If you would invest 22,951 in Rheinmetall AG on November 2, 2024 and sell it today you would earn a total of 52,089 from holding Rheinmetall AG or generate 226.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rheinmetall AG vs. ATOSS Software SE
Performance |
| Timeline |
| Rheinmetall AG |
| ATOSS Software SE |
Rheinmetall and ATOSS Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and ATOSS Software
The main advantage of trading using opposite Rheinmetall and ATOSS Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall position performs unexpectedly, ATOSS Software 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 ATOSS Software will offset losses from the drop in ATOSS Software's long position.| Rheinmetall vs. STMICROELECTRONICS | Rheinmetall vs. AOI Electronics Co | Rheinmetall vs. KIMBALL ELECTRONICS | Rheinmetall vs. STMicroelectronics NV |
| ATOSS Software vs. Warner Music Group | ATOSS Software vs. CHINA TONTINE WINES | ATOSS Software vs. VIVA WINE GROUP | ATOSS Software vs. Tencent Music Entertainment |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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