Correlation Between Rompetrol Rafi and Norofert
Can any of the company-specific risk be diversified away by investing in both Rompetrol Rafi and Norofert 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 Norofert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rompetrol Rafi and Norofert SA, you can compare the effects of market volatilities on Rompetrol Rafi and Norofert 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 Norofert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rompetrol Rafi and Norofert.
Diversification Opportunities for Rompetrol Rafi and Norofert
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rompetrol and Norofert is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rompetrol Rafi and Norofert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norofert SA 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 Norofert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norofert SA has no effect on the direction of Rompetrol Rafi i.e., Rompetrol Rafi and Norofert go up and down completely randomly.
Pair Corralation between Rompetrol Rafi and Norofert
Assuming the 90 days trading horizon Rompetrol Rafi is expected to under-perform the Norofert. In addition to that, Rompetrol Rafi is 1.47 times more volatile than Norofert SA. It trades about -0.15 of its total potential returns per unit of risk. Norofert SA is currently generating about 0.1 per unit of volatility. If you would invest 358.00 in Norofert SA on August 31, 2024 and sell it today you would earn a total of 12.00 from holding Norofert SA or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rompetrol Rafi vs. Norofert SA
Performance |
| Timeline |
| Rompetrol Rafi |
| Norofert SA |
Rompetrol Rafi and Norofert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rompetrol Rafi and Norofert
The main advantage of trading using opposite Rompetrol Rafi and Norofert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rompetrol Rafi position performs unexpectedly, Norofert 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 Norofert will offset losses from the drop in Norofert's long position.| Rompetrol Rafi vs. TRANSILVANIA LEASING SI | Rompetrol Rafi vs. AROBS TRANSILVANIA SOFTWARE | Rompetrol Rafi vs. Evergent Investments SA | Rompetrol Rafi vs. GRUPUL INDUSTRIAL ELECTROCONTACT |
| Norofert vs. Evergent Investments SA | Norofert vs. IM Vinaria Purcari | Norofert vs. AROBS TRANSILVANIA SOFTWARE | Norofert vs. Infinity Capital 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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