Correlation Between RTX AS and Matas AS
Can any of the company-specific risk be diversified away by investing in both RTX AS and Matas AS 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 Matas AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTX AS and Matas AS, you can compare the effects of market volatilities on RTX AS and Matas AS 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 Matas AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTX AS and Matas AS.
Diversification Opportunities for RTX AS and Matas AS
Very good diversification
The 3 months correlation between RTX and Matas is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding RTX AS and Matas AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matas AS 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 Matas AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matas AS has no effect on the direction of RTX AS i.e., RTX AS and Matas AS go up and down completely randomly.
Pair Corralation between RTX AS and Matas AS
Assuming the 90 days trading horizon RTX AS is expected to under-perform the Matas AS. But the stock apears to be less risky and, when comparing its historical volatility, RTX AS is 1.66 times less risky than Matas AS. The stock trades about -0.36 of its potential returns per unit of risk. The Matas AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12,520 in Matas AS on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Matas AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTX AS vs. Matas AS
Performance |
| Timeline |
| RTX AS |
| Matas AS |
RTX AS and Matas AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTX AS and Matas AS
The main advantage of trading using opposite RTX AS and Matas AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTX AS position performs unexpectedly, Matas AS 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 Matas AS will offset losses from the drop in Matas AS's long position.The idea behind RTX AS and Matas AS 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.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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