Correlation Between Rheinmetall and Kambi Group
Can any of the company-specific risk be diversified away by investing in both Rheinmetall and Kambi Group 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 Kambi Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and Kambi Group plc, you can compare the effects of market volatilities on Rheinmetall and Kambi Group 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 Kambi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and Kambi Group.
Diversification Opportunities for Rheinmetall and Kambi Group
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rheinmetall and Kambi is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and Kambi Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kambi Group 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 Kambi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kambi Group plc has no effect on the direction of Rheinmetall i.e., Rheinmetall and Kambi Group go up and down completely randomly.
Pair Corralation between Rheinmetall and Kambi Group
Assuming the 90 days horizon Rheinmetall AG is expected to generate 5.86 times more return on investment than Kambi Group. However, Rheinmetall is 5.86 times more volatile than Kambi Group plc. It trades about 0.22 of its potential returns per unit of risk. Kambi Group plc is currently generating about 0.22 per unit of risk. If you would invest 64,350 in Rheinmetall AG on October 21, 2024 and sell it today you would earn a total of 6,805 from holding Rheinmetall AG or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rheinmetall AG vs. Kambi Group plc
Performance |
| Timeline |
| Rheinmetall AG |
| Kambi Group plc |
Rheinmetall and Kambi Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and Kambi Group
The main advantage of trading using opposite Rheinmetall and Kambi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall position performs unexpectedly, Kambi Group 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 Kambi Group will offset losses from the drop in Kambi Group's long position.| Rheinmetall vs. Airbus Group SE | Rheinmetall vs. Safran SA | Rheinmetall vs. Embraer SA ADR | Rheinmetall vs. BAE Systems PLC |
| Kambi Group vs. Light Wonder | Kambi Group vs. Everi Holdings | Kambi Group vs. PlayAGS | Kambi Group vs. Accel 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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