Correlation Between RVRC Holding and Nimbus Group
Can any of the company-specific risk be diversified away by investing in both RVRC Holding and Nimbus Group 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 RVRC Holding and Nimbus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RVRC Holding AB and Nimbus Group AB, you can compare the effects of market volatilities on RVRC Holding and Nimbus Group 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 RVRC Holding with a short position of Nimbus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of RVRC Holding and Nimbus Group.
Diversification Opportunities for RVRC Holding and Nimbus Group
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RVRC and Nimbus is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding RVRC Holding AB and Nimbus Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nimbus Group AB and RVRC Holding 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 RVRC Holding AB are associated (or correlated) with Nimbus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nimbus Group AB has no effect on the direction of RVRC Holding i.e., RVRC Holding and Nimbus Group go up and down completely randomly.
Pair Corralation between RVRC Holding and Nimbus Group
Assuming the 90 days trading horizon RVRC Holding AB is expected to generate 0.95 times more return on investment than Nimbus Group. However, RVRC Holding AB is 1.06 times less risky than Nimbus Group. It trades about -0.03 of its potential returns per unit of risk. Nimbus Group AB is currently generating about -0.05 per unit of risk. If you would invest 5,628 in RVRC Holding AB on September 12, 2024 and sell it today you would lose (1,358) from holding RVRC Holding AB or give up 24.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RVRC Holding AB vs. Nimbus Group AB
Performance |
| Timeline |
| RVRC Holding AB |
| Nimbus Group AB |
RVRC Holding and Nimbus Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RVRC Holding and Nimbus Group
The main advantage of trading using opposite RVRC Holding and Nimbus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RVRC Holding position performs unexpectedly, Nimbus Group 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 Nimbus Group will offset losses from the drop in Nimbus Group's long position.| RVRC Holding vs. AstraZeneca PLC | RVRC Holding vs. Investor AB ser | RVRC Holding vs. Investor AB ser | RVRC Holding vs. Atlas Copco AB |
| Nimbus Group vs. Dometic Group AB | Nimbus Group vs. Garo AB | Nimbus Group vs. Byggmax Group AB | Nimbus Group vs. Nordnet AB |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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