Correlation Between RTX AS and Gabriel Holding
Can any of the company-specific risk be diversified away by investing in both RTX AS and Gabriel Holding 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 RTX AS and Gabriel Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTX AS and Gabriel Holding, you can compare the effects of market volatilities on RTX AS and Gabriel Holding 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 RTX AS with a short position of Gabriel Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTX AS and Gabriel Holding.
Diversification Opportunities for RTX AS and Gabriel Holding
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RTX and Gabriel is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding RTX AS and Gabriel Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabriel Holding and RTX AS 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 RTX AS are associated (or correlated) with Gabriel Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabriel Holding has no effect on the direction of RTX AS i.e., RTX AS and Gabriel Holding go up and down completely randomly.
Pair Corralation between RTX AS and Gabriel Holding
Assuming the 90 days trading horizon RTX AS is expected to generate 1.08 times more return on investment than Gabriel Holding. However, RTX AS is 1.08 times more volatile than Gabriel Holding. It trades about 0.26 of its potential returns per unit of risk. Gabriel Holding is currently generating about -0.21 per unit of risk. If you would invest 5,680 in RTX AS on October 26, 2024 and sell it today you would earn a total of 820.00 from holding RTX AS or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTX AS vs. Gabriel Holding
Performance |
| Timeline |
| RTX AS |
| Gabriel Holding |
RTX AS and Gabriel Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTX AS and Gabriel Holding
The main advantage of trading using opposite RTX AS and Gabriel Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTX AS position performs unexpectedly, Gabriel Holding 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 Gabriel Holding will offset losses from the drop in Gabriel Holding's long position.The idea behind RTX AS and Gabriel Holding 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.| Gabriel Holding vs. SP Group AS | Gabriel Holding vs. Columbus AS | Gabriel Holding vs. Schouw Co | Gabriel Holding vs. RTX AS |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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