Correlation Between REINET INVESTMENTS and PNE AG

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Can any of the company-specific risk be diversified away by investing in both REINET INVESTMENTS and PNE AG 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 PNE AG 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 PNE AG, you can compare the effects of market volatilities on REINET INVESTMENTS and PNE AG 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 PNE AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of REINET INVESTMENTS and PNE AG.

Diversification Opportunities for REINET INVESTMENTS and PNE AG

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between REINET and PNE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding REINET INVESTMENTS SCA and PNE AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNE AG 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 PNE AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNE AG has no effect on the direction of REINET INVESTMENTS i.e., REINET INVESTMENTS and PNE AG go up and down completely randomly.

Pair Corralation between REINET INVESTMENTS and PNE AG

Assuming the 90 days horizon REINET INVESTMENTS SCA is expected to generate 1.67 times more return on investment than PNE AG. However, REINET INVESTMENTS is 1.67 times more volatile than PNE AG. It trades about 0.02 of its potential returns per unit of risk. PNE AG is currently generating about -0.13 per unit of risk. If you would invest  2,326  in REINET INVESTMENTS SCA on September 3, 2024 and sell it today you would earn a total of  94.00  from holding REINET INVESTMENTS SCA or generate 4.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

REINET INVESTMENTS SCA  vs.  PNE AG

 Performance 
       Timeline  
REINET INVESTMENTS SCA 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in REINET INVESTMENTS SCA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REINET INVESTMENTS may actually be approaching a critical reversion point that can send shares even higher in January 2025.
PNE AG 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PNE AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PNE AG is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

REINET INVESTMENTS and PNE AG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with REINET INVESTMENTS and PNE AG

The main advantage of trading using opposite REINET INVESTMENTS and PNE AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REINET INVESTMENTS position performs unexpectedly, PNE AG 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 PNE AG will offset losses from the drop in PNE AG's long position.
The idea behind REINET INVESTMENTS SCA and PNE AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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