Correlation Between RATH Aktiengesellscha and Oberbank

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

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

Diversification Opportunities for RATH Aktiengesellscha and Oberbank

-0.71

Correlation Coefficient

RATH Aktiengesellscha  Oberbank

Pay attention - limited upside

The 3 months correlation between RATH and Oberbank is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding RATH Aktiengesellschaft and Oberbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberbank AG and RATH Aktiengesellscha 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 RATH Aktiengesellschaft are associated (or correlated) with Oberbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberbank AG has no effect on the direction of RATH Aktiengesellscha i.e., RATH Aktiengesellscha and Oberbank go up and down completely randomly.

Pair Corralation between RATH Aktiengesellscha and Oberbank

Assuming the 90 days trading horizon RATH Aktiengesellschaft is expected to under-perform the Oberbank. In addition to that, RATH Aktiengesellscha is 13.48 times more volatile than Oberbank AG. It trades about -0.09 of its total potential returns per unit of risk. Oberbank AG is currently generating about 0.18 per unit of volatility. If you would invest  6,980  in Oberbank AG on December 30, 2024 and sell it today you would earn a total of  40.00  from holding Oberbank AG or generate 0.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

RATH Aktiengesellschaft  vs.  Oberbank AG

RATH Aktiengesellschaft

Risk-Adjusted Performance

Very Weak

Over the last 90 days RATH Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, RATH Aktiengesellscha is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Oberbank AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oberbank AG are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Oberbank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with RATH Aktiengesellscha and Oberbank

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

The idea behind RATH Aktiengesellschaft and Oberbank 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.