Correlation Between Bet At and Revolution Beauty

Can any of the company-specific risk be diversified away by investing in both Bet At and Revolution Beauty 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 Bet At and Revolution Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between bet at home AG and Revolution Beauty Group, you can compare the effects of market volatilities on Bet At and Revolution Beauty 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 Bet At with a short position of Revolution Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet At and Revolution Beauty.

Diversification Opportunities for Bet At and Revolution Beauty

0.91

Correlation Coefficient

Bet At  Revolution Beauty

Almost no diversification

The 3 months correlation between Bet and Revolution is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Revolution Beauty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolution Beauty and Bet At 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 bet at home AG are associated (or correlated) with Revolution Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolution Beauty has no effect on the direction of Bet At i.e., Bet At and Revolution Beauty go up and down completely randomly.

Pair Corralation between Bet At and Revolution Beauty

Assuming the 90 days trading horizon bet at home AG is expected to under-perform the Revolution Beauty. But the stock apears to be less risky and, when comparing its historical volatility, bet at home AG is 1.23 times less risky than Revolution Beauty. The stock trades about -0.27 of its potential returns per unit of risk. The Revolution Beauty Group is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest  1,510  in Revolution Beauty Group on September 4, 2024 and sell it today you would lose (233.00) from holding Revolution Beauty Group or give up 15.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

bet at home AG  vs.  Revolution Beauty Group

bet at home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bet at home AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Revolution Beauty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Revolution Beauty Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bet At and Revolution Beauty

The main advantage of trading using opposite Bet At and Revolution Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet At position performs unexpectedly, Revolution Beauty 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 Revolution Beauty will offset losses from the drop in Revolution Beauty's long position.

The idea behind bet at home AG and Revolution Beauty Group 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.