Correlation Between Der International and ROPEOK Technology

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

By analyzing existing cross correlation between Der International Home and ROPEOK Technology Group, you can compare the effects of market volatilities on Der International and ROPEOK Technology 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 Der International with a short position of ROPEOK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Der International and ROPEOK Technology.

Diversification Opportunities for Der International and ROPEOK Technology

0.81

Correlation Coefficient

Der International  ROPEOK Technology

Very poor diversification

The 3 months correlation between Der and ROPEOK is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Der International Home and ROPEOK Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROPEOK Technology and Der International 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 Der International Home are associated (or correlated) with ROPEOK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROPEOK Technology has no effect on the direction of Der International i.e., Der International and ROPEOK Technology go up and down completely randomly.

Pair Corralation between Der International and ROPEOK Technology

Assuming the 90 days trading horizon Der International Home is expected to under-perform the ROPEOK Technology. In addition to that, Der International is 1.29 times more volatile than ROPEOK Technology Group. It trades about -0.2 of its total potential returns per unit of risk. ROPEOK Technology Group is currently generating about -0.02 per unit of volatility. If you would invest  935.00  in ROPEOK Technology Group on September 28, 2024 and sell it today you would lose (26.00) from holding ROPEOK Technology Group or give up 2.78% of portfolio value over 90 days.

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

Der International Home  vs.  ROPEOK Technology Group

Der International Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Der International Home has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ROPEOK Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ROPEOK Technology Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ROPEOK Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Der International and ROPEOK Technology

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

The idea behind Der International Home and ROPEOK Technology Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.