Correlation Between RVRC Holding and Desenio Group

Can any of the company-specific risk be diversified away by investing in both RVRC Holding and Desenio Group 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 RVRC Holding and Desenio Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RVRC Holding AB and Desenio Group AB, you can compare the effects of market volatilities on RVRC Holding and Desenio Group 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 RVRC Holding with a short position of Desenio Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of RVRC Holding and Desenio Group.

Diversification Opportunities for RVRC Holding and Desenio Group

-0.51

Correlation Coefficient

RVRC Holding  Desenio Group

Excellent diversification

The 3 months correlation between RVRC and Desenio is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding RVRC Holding AB and Desenio Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desenio Group AB and RVRC Holding 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 RVRC Holding AB are associated (or correlated) with Desenio Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desenio Group AB has no effect on the direction of RVRC Holding i.e., RVRC Holding and Desenio Group go up and down completely randomly.

Pair Corralation between RVRC Holding and Desenio Group

Assuming the 90 days trading horizon RVRC Holding AB is expected to generate 0.27 times more return on investment than Desenio Group. However, RVRC Holding AB is 3.76 times less risky than Desenio Group. It trades about 0.06 of its potential returns per unit of risk. Desenio Group AB is currently generating about -0.14 per unit of risk. If you would invest  4,098  in RVRC Holding AB on December 30, 2024 and sell it today you would earn a total of  302.00  from holding RVRC Holding AB or generate 7.37% return on investment over 90 days.

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

RVRC Holding AB  vs.  Desenio Group AB

RVRC Holding AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RVRC Holding AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, RVRC Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Desenio Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Desenio Group AB 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with RVRC Holding and Desenio Group

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

The idea behind RVRC Holding AB and Desenio Group AB 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.