Correlation Between Allegroeu and Reebonz Holding

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

By analyzing existing cross correlation between Allegroeu SA and Reebonz Holding, you can compare the effects of market volatilities on Allegroeu and Reebonz Holding 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 Allegroeu with a short position of Reebonz Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegroeu and Reebonz Holding.

Diversification Opportunities for Allegroeu and Reebonz Holding

0.0

Correlation Coefficient

Allegroeu  Reebonz Holding

Pay attention - limited upside

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

Pair Corralation between Allegroeu and Reebonz Holding

If you would invest  671.00  in Allegroeu SA on December 30, 2024 and sell it today you would earn a total of  94.00  from holding Allegroeu SA or generate 14.01% return on investment over 90 days.

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

Allegroeu SA  vs.  Reebonz Holding

Allegroeu SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allegroeu SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Allegroeu reported solid returns over the last few months and may actually be approaching a breakup point.

Reebonz Holding

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Allegroeu and Reebonz Holding

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

The idea behind Allegroeu SA and Reebonz Holding 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.