Correlation Between RATH Aktiengesellscha and Raiffeisen Bank

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

By analyzing existing cross correlation between RATH Aktiengesellschaft and Raiffeisen Bank International, you can compare the effects of market volatilities on RATH Aktiengesellscha and Raiffeisen Bank 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 Raiffeisen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of RATH Aktiengesellscha and Raiffeisen Bank.

Diversification Opportunities for RATH Aktiengesellscha and Raiffeisen Bank

-0.58

Correlation Coefficient

RATH Aktiengesellscha  Raiffeisen Bank

Excellent diversification

The 3 months correlation between RATH and Raiffeisen is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding RATH Aktiengesellschaft and Raiffeisen Bank International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raiffeisen Bank Inte 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 Raiffeisen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raiffeisen Bank Inte has no effect on the direction of RATH Aktiengesellscha i.e., RATH Aktiengesellscha and Raiffeisen Bank go up and down completely randomly.

Pair Corralation between RATH Aktiengesellscha and Raiffeisen Bank

Assuming the 90 days trading horizon RATH Aktiengesellschaft is expected to under-perform the Raiffeisen Bank. But the stock apears to be less risky and, when comparing its historical volatility, RATH Aktiengesellschaft is 4.28 times less risky than Raiffeisen Bank. The stock trades about -0.09 of its potential returns per unit of risk. The Raiffeisen Bank International is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,975  in Raiffeisen Bank International on December 30, 2024 and sell it today you would earn a total of  577.00  from holding Raiffeisen Bank International or generate 29.22% return on investment over 90 days.

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

RATH Aktiengesellschaft  vs.  Raiffeisen Bank International

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.

Raiffeisen Bank Inte

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Raiffeisen Bank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RATH Aktiengesellscha and Raiffeisen Bank

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

The idea behind RATH Aktiengesellschaft and Raiffeisen Bank International 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.