Correlation Between REINET INVESTMENTS and Avis Budget

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

By analyzing existing cross correlation between REINET INVESTMENTS SCA and Avis Budget Group, you can compare the effects of market volatilities on REINET INVESTMENTS and Avis Budget 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 REINET INVESTMENTS with a short position of Avis Budget. Check out your portfolio center. Please also check ongoing floating volatility patterns of REINET INVESTMENTS and Avis Budget.

Diversification Opportunities for REINET INVESTMENTS and Avis Budget

0.25

Correlation Coefficient

REINET INVESTMENTS  Avis Budget

Modest diversification

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

Pair Corralation between REINET INVESTMENTS and Avis Budget

Assuming the 90 days horizon REINET INVESTMENTS SCA is expected to generate 0.88 times more return on investment than Avis Budget. However, REINET INVESTMENTS SCA is 1.14 times less risky than Avis Budget. It trades about 0.04 of its potential returns per unit of risk. Avis Budget Group is currently generating about -0.03 per unit of risk. If you would invest  1,610  in REINET INVESTMENTS SCA on October 4, 2024 and sell it today you would earn a total of  870.00  from holding REINET INVESTMENTS SCA or generate 54.04% return on investment over 90 days.

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

REINET INVESTMENTS SCA  vs.  Avis Budget Group

REINET INVESTMENTS SCA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REINET INVESTMENTS SCA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REINET INVESTMENTS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Avis Budget Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Avis Budget Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Avis Budget is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with REINET INVESTMENTS and Avis Budget

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

The idea behind REINET INVESTMENTS SCA and Avis Budget Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.