Correlation Between ALLFUNDS GROUP and RWE Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both ALLFUNDS GROUP and RWE Aktiengesellscha 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 ALLFUNDS GROUP and RWE Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ALLFUNDS GROUP EO 0025 and RWE Aktiengesellschaft, you can compare the effects of market volatilities on ALLFUNDS GROUP and RWE Aktiengesellscha 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 ALLFUNDS GROUP with a short position of RWE Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLFUNDS GROUP and RWE Aktiengesellscha.

Diversification Opportunities for ALLFUNDS GROUP and RWE Aktiengesellscha

0.0

Correlation Coefficient

ALLFUNDS GROUP  RWE Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between ALLFUNDS and RWE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ALLFUNDS GROUP EO 0025 and RWE Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RWE Aktiengesellschaft and ALLFUNDS GROUP 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 ALLFUNDS GROUP EO 0025 are associated (or correlated) with RWE Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RWE Aktiengesellschaft has no effect on the direction of ALLFUNDS GROUP i.e., ALLFUNDS GROUP and RWE Aktiengesellscha go up and down completely randomly.

Pair Corralation between ALLFUNDS GROUP and RWE Aktiengesellscha

If you would invest (100.00) in RWE Aktiengesellschaft on October 11, 2024 and sell it today you would earn a total of  100.00  from holding RWE Aktiengesellschaft or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ALLFUNDS GROUP EO 0025  vs.  RWE Aktiengesellschaft

ALLFUNDS GROUP EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALLFUNDS GROUP EO 0025 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ALLFUNDS GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

RWE Aktiengesellschaft

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RWE Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, RWE Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ALLFUNDS GROUP and RWE Aktiengesellscha

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

The idea behind ALLFUNDS GROUP EO 0025 and RWE Aktiengesellschaft 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.