Correlation Between Reinet Investments and Astoria Investments
Can any of the company-specific risk be diversified away by investing in both Reinet Investments and Astoria Investments 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 Reinet Investments and Astoria Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinet Investments SCA and Astoria Investments, you can compare the effects of market volatilities on Reinet Investments and Astoria Investments 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 Reinet Investments with a short position of Astoria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinet Investments and Astoria Investments.
Diversification Opportunities for Reinet Investments and Astoria Investments
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Reinet and Astoria is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Reinet Investments SCA and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments and Reinet Investments 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 Reinet Investments SCA are associated (or correlated) with Astoria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoria Investments has no effect on the direction of Reinet Investments i.e., Reinet Investments and Astoria Investments go up and down completely randomly.
Pair Corralation between Reinet Investments and Astoria Investments
Assuming the 90 days trading horizon Reinet Investments SCA is expected to generate 0.47 times more return on investment than Astoria Investments. However, Reinet Investments SCA is 2.11 times less risky than Astoria Investments. It trades about -0.08 of its potential returns per unit of risk. Astoria Investments is currently generating about -0.09 per unit of risk. If you would invest 4,848,200 in Reinet Investments SCA on August 27, 2024 and sell it today you would lose (94,700) from holding Reinet Investments SCA or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinet Investments SCA vs. Astoria Investments
Performance |
| Timeline |
| Reinet Investments SCA |
| Astoria Investments |
Reinet Investments and Astoria Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinet Investments and Astoria Investments
The main advantage of trading using opposite Reinet Investments and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinet Investments position performs unexpectedly, Astoria Investments 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 Astoria Investments will offset losses from the drop in Astoria Investments' long position.| Reinet Investments vs. CA Sales Holdings | Reinet Investments vs. Ascendis Health | Reinet Investments vs. Deneb Investments | Reinet Investments vs. British American Tobacco |
| Astoria Investments vs. Trematon Capital Investments | Astoria Investments vs. Frontier Transport Holdings | Astoria Investments vs. Kap Industrial Holdings | Astoria Investments vs. Afine Investments |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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