Correlation Between Reacap Financial and Obour Land

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

By analyzing existing cross correlation between Reacap Financial Investments and Obour Land For, you can compare the effects of market volatilities on Reacap Financial and Obour Land 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 Reacap Financial with a short position of Obour Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reacap Financial and Obour Land.

Diversification Opportunities for Reacap Financial and Obour Land

0.25

Correlation Coefficient

Reacap Financial  Obour Land

Modest diversification

The 3 months correlation between Reacap and Obour is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Reacap Financial Investments and Obour Land For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obour Land For and Reacap Financial 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 Reacap Financial Investments are associated (or correlated) with Obour Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obour Land For has no effect on the direction of Reacap Financial i.e., Reacap Financial and Obour Land go up and down completely randomly.

Pair Corralation between Reacap Financial and Obour Land

Assuming the 90 days trading horizon Reacap Financial Investments is expected to under-perform the Obour Land. But the stock apears to be less risky and, when comparing its historical volatility, Reacap Financial Investments is 1.25 times less risky than Obour Land. The stock trades about -0.04 of its potential returns per unit of risk. The Obour Land For is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,818  in Obour Land For on October 26, 2024 and sell it today you would earn a total of  142.00  from holding Obour Land For or generate 7.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.04%
Values	Daily Returns

Reacap Financial Investments  vs.  Obour Land For

Reacap Financial Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reacap Financial Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Obour Land For

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Obour Land For are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Obour Land may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Reacap Financial and Obour Land

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

The idea behind Reacap Financial Investments and Obour Land For 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.