Correlation Between Rocket Internet and FANUC PUNSPADR

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

By analyzing existing cross correlation between Rocket Internet SE and FANUC PUNSPADR 110, you can compare the effects of market volatilities on Rocket Internet and FANUC PUNSPADR 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 Rocket Internet with a short position of FANUC PUNSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocket Internet and FANUC PUNSPADR.

Diversification Opportunities for Rocket Internet and FANUC PUNSPADR

0.1

Correlation Coefficient

Rocket Internet  FANUC PUNSPADR

Average diversification

The 3 months correlation between Rocket and FANUC is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Rocket Internet SE and FANUC PUNSPADR 110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANUC PUNSPADR 110 and Rocket Internet 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 Rocket Internet SE are associated (or correlated) with FANUC PUNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANUC PUNSPADR 110 has no effect on the direction of Rocket Internet i.e., Rocket Internet and FANUC PUNSPADR go up and down completely randomly.

Pair Corralation between Rocket Internet and FANUC PUNSPADR

Assuming the 90 days trading horizon Rocket Internet SE is expected to generate 1.36 times more return on investment than FANUC PUNSPADR. However, Rocket Internet is 1.36 times more volatile than FANUC PUNSPADR 110. It trades about 0.16 of its potential returns per unit of risk. FANUC PUNSPADR 110 is currently generating about 0.2 per unit of risk. If you would invest  1,450  in Rocket Internet SE on October 8, 2024 and sell it today you would earn a total of  80.00  from holding Rocket Internet SE or generate 5.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Rocket Internet SE  vs.  FANUC PUNSPADR 110

Rocket Internet SE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rocket Internet SE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Rocket Internet is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

FANUC PUNSPADR 110

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FANUC PUNSPADR 110 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, FANUC PUNSPADR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Rocket Internet and FANUC PUNSPADR

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

The idea behind Rocket Internet SE and FANUC PUNSPADR 110 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.