Correlation Between BASF SE and Raba Jarmuipari

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both BASF SE 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 BASF SE and Raba Jarmuipari into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE and Raba Jarmuipari Holding, you can compare the effects of market volatilities on BASF SE 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 BASF SE with a short position of Raba Jarmuipari. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and Raba Jarmuipari.

Diversification Opportunities for BASF SE and Raba Jarmuipari

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between BASF and Raba is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE 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 BASF SE 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 BASF SE 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 BASF SE i.e., BASF SE and Raba Jarmuipari go up and down completely randomly.

Pair Corralation between BASF SE and Raba Jarmuipari

Assuming the 90 days trading horizon BASF SE is expected to generate 1.42 times more return on investment than Raba Jarmuipari. However, BASF SE is 1.42 times more volatile than Raba Jarmuipari Holding. It trades about 0.06 of its potential returns per unit of risk. Raba Jarmuipari Holding is currently generating about 0.01 per unit of risk. If you would invest  1,799,400  in BASF SE on September 15, 2024 and sell it today you would earn a total of  65,000  from holding BASF SE or generate 3.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy48.28%
ValuesDaily Returns

BASF SE  vs.  Raba Jarmuipari Holding

 Performance 
       Timeline  
BASF SE 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Insignificant
Over the last 90 days BASF SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unsteady basic indicators, BASF SE may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Raba Jarmuipari Holding 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Raba Jarmuipari Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Raba Jarmuipari is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BASF SE and Raba Jarmuipari Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BASF SE and Raba Jarmuipari

The main advantage of trading using opposite BASF SE and Raba Jarmuipari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE 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 BASF SE 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.
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments