Correlation Between RTW Venture and Cembra Money

Can any of the company-specific risk be diversified away by investing in both RTW Venture and Cembra Money 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 RTW Venture and Cembra Money into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RTW Venture Fund and Cembra Money Bank, you can compare the effects of market volatilities on RTW Venture and Cembra Money 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 RTW Venture with a short position of Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTW Venture and Cembra Money.

Diversification Opportunities for RTW Venture and Cembra Money

-0.72

Correlation Coefficient

RTW Venture  Cembra Money

Pay attention - limited upside

The 3 months correlation between RTW and Cembra is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding RTW Venture Fund and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank and RTW Venture 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 RTW Venture Fund are associated (or correlated) with Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of RTW Venture i.e., RTW Venture and Cembra Money go up and down completely randomly.

Pair Corralation between RTW Venture and Cembra Money

Assuming the 90 days trading horizon RTW Venture Fund is expected to under-perform the Cembra Money. In addition to that, RTW Venture is 1.02 times more volatile than Cembra Money Bank. It trades about -0.16 of its total potential returns per unit of risk. Cembra Money Bank is currently generating about 0.24 per unit of volatility. If you would invest  8,195  in Cembra Money Bank on December 30, 2024 and sell it today you would earn a total of  1,790  from holding Cembra Money Bank or generate 21.84% return on investment over 90 days.

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

RTW Venture Fund  vs.  Cembra Money Bank

RTW Venture Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days RTW Venture Fund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cembra Money Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cembra Money unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RTW Venture and Cembra Money

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

The idea behind RTW Venture Fund and Cembra Money Bank 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.