Correlation Between Remarul 16 and Rompetrol Rafi

Can any of the company-specific risk be diversified away by investing in both Remarul 16 and Rompetrol Rafi 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 Remarul 16 and Rompetrol Rafi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Remarul 16 Februarie and Rompetrol Rafi, you can compare the effects of market volatilities on Remarul 16 and Rompetrol Rafi 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 Remarul 16 with a short position of Rompetrol Rafi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Remarul 16 and Rompetrol Rafi.

Diversification Opportunities for Remarul 16 and Rompetrol Rafi

0.23

Correlation Coefficient

Remarul 16  Rompetrol Rafi

Modest diversification

The 3 months correlation between Remarul and Rompetrol is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Remarul 16 Februarie and Rompetrol Rafi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rompetrol Rafi and Remarul 16 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 Remarul 16 Februarie are associated (or correlated) with Rompetrol Rafi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rompetrol Rafi has no effect on the direction of Remarul 16 i.e., Remarul 16 and Rompetrol Rafi go up and down completely randomly.

Pair Corralation between Remarul 16 and Rompetrol Rafi

Assuming the 90 days trading horizon Remarul 16 Februarie is expected to under-perform the Rompetrol Rafi. In addition to that, Remarul 16 is 1.06 times more volatile than Rompetrol Rafi. It trades about -0.29 of its total potential returns per unit of risk. Rompetrol Rafi is currently generating about -0.13 per unit of volatility. If you would invest  7.15  in Rompetrol Rafi on October 15, 2024 and sell it today you would lose (0.20) from holding Rompetrol Rafi or give up 2.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.31%
Values	Daily Returns

Remarul 16 Februarie  vs.  Rompetrol Rafi

Remarul 16 Februarie

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Remarul 16 Februarie has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Rompetrol Rafi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rompetrol Rafi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Rompetrol Rafi is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Remarul 16 and Rompetrol Rafi

The main advantage of trading using opposite Remarul 16 and Rompetrol Rafi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Remarul 16 position performs unexpectedly, Rompetrol Rafi 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 Rompetrol Rafi will offset losses from the drop in Rompetrol Rafi's long position.

The idea behind Remarul 16 Februarie and Rompetrol Rafi 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.