Correlation Between Reckitt Benckiser and JSC National
Can any of the company-specific risk be diversified away by investing in both Reckitt Benckiser and JSC National 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 Reckitt Benckiser and JSC National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reckitt Benckiser Group and JSC National Atomic, you can compare the effects of market volatilities on Reckitt Benckiser and JSC National 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 Reckitt Benckiser with a short position of JSC National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reckitt Benckiser and JSC National.
Diversification Opportunities for Reckitt Benckiser and JSC National
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Reckitt and JSC is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Reckitt Benckiser Group and JSC National Atomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC National Atomic and Reckitt Benckiser 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 Reckitt Benckiser Group are associated (or correlated) with JSC National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC National Atomic has no effect on the direction of Reckitt Benckiser i.e., Reckitt Benckiser and JSC National go up and down completely randomly.
Pair Corralation between Reckitt Benckiser and JSC National
Assuming the 90 days trading horizon Reckitt Benckiser is expected to generate 1.6 times less return on investment than JSC National. But when comparing it to its historical volatility, Reckitt Benckiser Group is 1.03 times less risky than JSC National. It trades about 0.07 of its potential returns per unit of risk. JSC National Atomic is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,935 in JSC National Atomic on September 13, 2024 and sell it today you would earn a total of 95.00 from holding JSC National Atomic or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Reckitt Benckiser Group vs. JSC National Atomic
Performance |
| Timeline |
| Reckitt Benckiser |
| JSC National Atomic |
Reckitt Benckiser and JSC National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reckitt Benckiser and JSC National
The main advantage of trading using opposite Reckitt Benckiser and JSC National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reckitt Benckiser position performs unexpectedly, JSC National 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 JSC National will offset losses from the drop in JSC National's long position.| Reckitt Benckiser vs. Samsung Electronics Co | Reckitt Benckiser vs. AMG Advanced Metallurgical | Reckitt Benckiser vs. Power Metal Resources | Reckitt Benckiser vs. European Metals Holdings |
| JSC National vs. Zoom Video Communications | JSC National vs. Enbridge | JSC National vs. Endo International PLC | JSC National vs. Bank of Georgia |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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