Correlation Between Rompetrol Rafi and Ssif Broker

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

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

Diversification Opportunities for Rompetrol Rafi and Ssif Broker

0.71

Correlation Coefficient

Rompetrol Rafi  Ssif Broker

Poor diversification

The 3 months correlation between Rompetrol and Ssif is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Rompetrol Rafi and Ssif Broker Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssif Broker Cl and Rompetrol Rafi 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 Rompetrol Rafi are associated (or correlated) with Ssif Broker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssif Broker Cl has no effect on the direction of Rompetrol Rafi i.e., Rompetrol Rafi and Ssif Broker go up and down completely randomly.

Pair Corralation between Rompetrol Rafi and Ssif Broker

Assuming the 90 days trading horizon Rompetrol Rafi is expected to under-perform the Ssif Broker. But the stock apears to be less risky and, when comparing its historical volatility, Rompetrol Rafi is 1.69 times less risky than Ssif Broker. The stock trades about -0.13 of its potential returns per unit of risk. The Ssif Broker Cl is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  8.70  in Ssif Broker Cl on October 15, 2024 and sell it today you would lose (0.20) from holding Ssif Broker Cl or give up 2.3% of portfolio value over 90 days.

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

Rompetrol Rafi  vs.  Ssif Broker Cl

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.

Ssif Broker Cl

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Rompetrol Rafi and Ssif Broker

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

The idea behind Rompetrol Rafi and Ssif Broker Cl 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.