Correlation Between Rai Way and CTS Eventim
Can any of the company-specific risk be diversified away by investing in both Rai Way and CTS Eventim 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 Rai Way and CTS Eventim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rai Way SpA and CTS Eventim AG, you can compare the effects of market volatilities on Rai Way and CTS Eventim 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 Rai Way with a short position of CTS Eventim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rai Way and CTS Eventim.
Diversification Opportunities for Rai Way and CTS Eventim
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rai and CTS is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Rai Way SpA and CTS Eventim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Eventim AG and Rai Way 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 Rai Way SpA are associated (or correlated) with CTS Eventim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Eventim AG has no effect on the direction of Rai Way i.e., Rai Way and CTS Eventim go up and down completely randomly.
Pair Corralation between Rai Way and CTS Eventim
Assuming the 90 days horizon Rai Way is expected to generate 2.03 times less return on investment than CTS Eventim. In addition to that, Rai Way is 1.07 times more volatile than CTS Eventim AG. It trades about 0.1 of its total potential returns per unit of risk. CTS Eventim AG is currently generating about 0.21 per unit of volatility. If you would invest 8,700 in CTS Eventim AG on December 3, 2024 and sell it today you would earn a total of 1,860 from holding CTS Eventim AG or generate 21.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Rai Way SpA vs. CTS Eventim AG
Performance |
Timeline |
Rai Way SpA |
CTS Eventim AG |
Rai Way and CTS Eventim Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rai Way and CTS Eventim
The main advantage of trading using opposite Rai Way and CTS Eventim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rai Way position performs unexpectedly, CTS Eventim 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 CTS Eventim will offset losses from the drop in CTS Eventim's long position.Rai Way vs. Japan Asia Investment | Rai Way vs. AGNC Investment Corp | Rai Way vs. ECHO INVESTMENT ZY | Rai Way vs. Keck Seng Investments |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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