Correlation Between REVO INSURANCE and Metro AG

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

By analyzing existing cross correlation between REVO INSURANCE SPA and Metro AG, you can compare the effects of market volatilities on REVO INSURANCE and Metro AG 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 REVO INSURANCE with a short position of Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and Metro AG.

Diversification Opportunities for REVO INSURANCE and Metro AG

0.0

Correlation Coefficient

REVO INSURANCE  Metro AG

Pay attention - limited upside

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

Pair Corralation between REVO INSURANCE and Metro AG

If you would invest  1,105  in REVO INSURANCE SPA on October 9, 2024 and sell it today you would earn a total of  60.00  from holding REVO INSURANCE SPA or generate 5.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

REVO INSURANCE SPA  vs.  Metro AG

REVO INSURANCE SPA

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REVO INSURANCE reported solid returns over the last few months and may actually be approaching a breakup point.

Metro AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with REVO INSURANCE and Metro AG

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

The idea behind REVO INSURANCE SPA and Metro AG 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.