Correlation Between Tradegate and REVLTNRY CNCPT

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

By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and REVLTNRY CNCPT, you can compare the effects of market volatilities on Tradegate and REVLTNRY CNCPT 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 Tradegate with a short position of REVLTNRY CNCPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and REVLTNRY CNCPT.

Diversification Opportunities for Tradegate and REVLTNRY CNCPT

-0.05

Correlation Coefficient

Tradegate  REVLTNRY CNCPT

Good diversification

The 3 months correlation between Tradegate and REVLTNRY is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and REVLTNRY CNCPT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVLTNRY CNCPT and Tradegate 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 Tradegate AG Wertpapierhandelsbank are associated (or correlated) with REVLTNRY CNCPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVLTNRY CNCPT has no effect on the direction of Tradegate i.e., Tradegate and REVLTNRY CNCPT go up and down completely randomly.

Pair Corralation between Tradegate and REVLTNRY CNCPT

Assuming the 90 days horizon Tradegate is expected to generate 38888.92 times less return on investment than REVLTNRY CNCPT. But when comparing it to its historical volatility, Tradegate AG Wertpapierhandelsbank is 399.33 times less risky than REVLTNRY CNCPT. It trades about 0.0 of its potential returns per unit of risk. REVLTNRY CNCPT is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  0.05  in REVLTNRY CNCPT on October 5, 2024 and sell it today you would earn a total of  0.50  from holding REVLTNRY CNCPT or generate 1000.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Tradegate AG Wertpapierhandels  vs.  REVLTNRY CNCPT

Tradegate AG Wertpap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tradegate AG Wertpapierhandelsbank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Tradegate is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

REVLTNRY CNCPT

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in REVLTNRY CNCPT are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, REVLTNRY CNCPT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tradegate and REVLTNRY CNCPT

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

The idea behind Tradegate AG Wertpapierhandelsbank and REVLTNRY CNCPT 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.