Correlation Between Rompetrol Rafi and Turism Hotelur
Can any of the company-specific risk be diversified away by investing in both Rompetrol Rafi and Turism Hotelur 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 Rompetrol Rafi and Turism Hotelur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rompetrol Rafi and Turism Hotelur, you can compare the effects of market volatilities on Rompetrol Rafi and Turism Hotelur 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 Rompetrol Rafi with a short position of Turism Hotelur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rompetrol Rafi and Turism Hotelur.
Diversification Opportunities for Rompetrol Rafi and Turism Hotelur
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rompetrol and Turism is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Rompetrol Rafi and Turism Hotelur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turism Hotelur and Rompetrol Rafi 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 Rompetrol Rafi are associated (or correlated) with Turism Hotelur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turism Hotelur has no effect on the direction of Rompetrol Rafi i.e., Rompetrol Rafi and Turism Hotelur go up and down completely randomly.
Pair Corralation between Rompetrol Rafi and Turism Hotelur
Assuming the 90 days trading horizon Rompetrol Rafi is expected to under-perform the Turism Hotelur. But the stock apears to be less risky and, when comparing its historical volatility, Rompetrol Rafi is 1.53 times less risky than Turism Hotelur. The stock trades about -0.1 of its potential returns per unit of risk. The Turism Hotelur is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Turism Hotelur on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Turism Hotelur or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rompetrol Rafi vs. Turism Hotelur
Performance |
| Timeline |
| Rompetrol Rafi |
| Turism Hotelur |
Rompetrol Rafi and Turism Hotelur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rompetrol Rafi and Turism Hotelur
The main advantage of trading using opposite Rompetrol Rafi and Turism Hotelur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rompetrol Rafi position performs unexpectedly, Turism Hotelur 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 Turism Hotelur will offset losses from the drop in Turism Hotelur's long position.| Rompetrol Rafi vs. Digi Communications NV | Rompetrol Rafi vs. TRANSILVANIA INVESTMENTS ALLIANCE | Rompetrol Rafi vs. Infinity Capital Investments | Rompetrol Rafi vs. Evergent Investments SA |
| Turism Hotelur vs. Evergent Investments SA | Turism Hotelur vs. AROBS TRANSILVANIA SOFTWARE | Turism Hotelur vs. Compania Hoteliera InterContinental | Turism Hotelur vs. Patria Bank SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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