Correlation Between Trematon Capital and Raubex

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

By analyzing existing cross correlation between Trematon Capital Investments and Raubex, you can compare the effects of market volatilities on Trematon Capital and Raubex 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 Trematon Capital with a short position of Raubex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and Raubex.

Diversification Opportunities for Trematon Capital and Raubex

-0.15

Correlation Coefficient

Trematon Capital  Raubex

Good diversification

The 3 months correlation between Trematon and Raubex is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and Raubex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raubex and Trematon Capital 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 Trematon Capital Investments are associated (or correlated) with Raubex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raubex has no effect on the direction of Trematon Capital i.e., Trematon Capital and Raubex go up and down completely randomly.

Pair Corralation between Trematon Capital and Raubex

Assuming the 90 days trading horizon Trematon Capital is expected to generate 23.81 times less return on investment than Raubex. In addition to that, Trematon Capital is 4.19 times more volatile than Raubex. It trades about 0.0 of its total potential returns per unit of risk. Raubex is currently generating about 0.13 per unit of volatility. If you would invest  510,672  in Raubex on September 25, 2024 and sell it today you would earn a total of  17,628  from holding Raubex or generate 3.45% return on investment over 90 days.

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

Trematon Capital Investments  vs.  Raubex

Trematon Capital Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trematon Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Trematon Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Raubex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raubex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Raubex is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Trematon Capital and Raubex

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

The idea behind Trematon Capital Investments and Raubex 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.