Correlation Between ALTEO Energiaszolgalta and Raba Jarmuipari

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

By analyzing existing cross correlation between ALTEO Energiaszolgaltato Nyrt and Raba Jarmuipari Holding, you can compare the effects of market volatilities on ALTEO Energiaszolgalta and Raba Jarmuipari 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 ALTEO Energiaszolgalta with a short position of Raba Jarmuipari. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALTEO Energiaszolgalta and Raba Jarmuipari.

Diversification Opportunities for ALTEO Energiaszolgalta and Raba Jarmuipari

-0.23

Correlation Coefficient

ALTEO Energiaszolgalta  Raba Jarmuipari

Very good diversification

The 3 months correlation between ALTEO and Raba is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ALTEO Energiaszolgaltato Nyrt and Raba Jarmuipari Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raba Jarmuipari Holding and ALTEO Energiaszolgalta 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 ALTEO Energiaszolgaltato Nyrt are associated (or correlated) with Raba Jarmuipari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raba Jarmuipari Holding has no effect on the direction of ALTEO Energiaszolgalta i.e., ALTEO Energiaszolgalta and Raba Jarmuipari go up and down completely randomly.

Pair Corralation between ALTEO Energiaszolgalta and Raba Jarmuipari

Assuming the 90 days trading horizon ALTEO Energiaszolgaltato Nyrt is expected to generate 0.82 times more return on investment than Raba Jarmuipari. However, ALTEO Energiaszolgaltato Nyrt is 1.22 times less risky than Raba Jarmuipari. It trades about 0.05 of its potential returns per unit of risk. Raba Jarmuipari Holding is currently generating about 0.02 per unit of risk. If you would invest  286,619  in ALTEO Energiaszolgaltato Nyrt on September 14, 2024 and sell it today you would earn a total of  123,381  from holding ALTEO Energiaszolgaltato Nyrt or generate 43.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.13%
Values	Daily Returns

ALTEO Energiaszolgaltato Nyrt  vs.  Raba Jarmuipari Holding

ALTEO Energiaszolgalta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALTEO Energiaszolgaltato Nyrt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Raba Jarmuipari Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Raba Jarmuipari Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Raba Jarmuipari is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ALTEO Energiaszolgalta and Raba Jarmuipari

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

The idea behind ALTEO Energiaszolgaltato Nyrt and Raba Jarmuipari 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.