Correlation Between FANUC PUNSPADR and Rocket Internet

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

By analyzing existing cross correlation between FANUC PUNSPADR 110 and Rocket Internet SE, you can compare the effects of market volatilities on FANUC PUNSPADR and Rocket Internet 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 FANUC PUNSPADR with a short position of Rocket Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of FANUC PUNSPADR and Rocket Internet.

Diversification Opportunities for FANUC PUNSPADR and Rocket Internet

0.0

Correlation Coefficient

FANUC PUNSPADR  Rocket Internet

Pay attention - limited upside

The 3 months correlation between FANUC and Rocket is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FANUC PUNSPADR 110 and Rocket Internet SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocket Internet SE and FANUC PUNSPADR 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 FANUC PUNSPADR 110 are associated (or correlated) with Rocket Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocket Internet SE has no effect on the direction of FANUC PUNSPADR i.e., FANUC PUNSPADR and Rocket Internet go up and down completely randomly.

Pair Corralation between FANUC PUNSPADR and Rocket Internet

Assuming the 90 days trading horizon FANUC PUNSPADR 110 is expected to generate 0.9 times more return on investment than Rocket Internet. However, FANUC PUNSPADR 110 is 1.12 times less risky than Rocket Internet. It trades about 0.47 of its potential returns per unit of risk. Rocket Internet SE is currently generating about -0.01 per unit of risk. If you would invest  1,200  in FANUC PUNSPADR 110 on October 23, 2024 and sell it today you would earn a total of  200.00  from holding FANUC PUNSPADR 110 or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

FANUC PUNSPADR 110  vs.  Rocket Internet SE

FANUC PUNSPADR 110

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FANUC PUNSPADR 110 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, FANUC PUNSPADR reported solid returns over the last few months and may actually be approaching a breakup point.

Rocket Internet SE

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rocket Internet SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Rocket Internet is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with FANUC PUNSPADR and Rocket Internet

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

The idea behind FANUC PUNSPADR 110 and Rocket Internet SE 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.