Correlation Between Facc AG and Raiffeisen Bank

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

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

Diversification Opportunities for Facc AG and Raiffeisen Bank

-0.29

Correlation Coefficient

Facc AG  Raiffeisen Bank

Very good diversification

The 3 months correlation between Facc and Raiffeisen is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Facc AG and Raiffeisen Bank International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raiffeisen Bank Inte and Facc AG 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 Facc AG are associated (or correlated) with Raiffeisen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raiffeisen Bank Inte has no effect on the direction of Facc AG i.e., Facc AG and Raiffeisen Bank go up and down completely randomly.

Pair Corralation between Facc AG and Raiffeisen Bank

Assuming the 90 days trading horizon Facc AG is expected to under-perform the Raiffeisen Bank. But the stock apears to be less risky and, when comparing its historical volatility, Facc AG is 1.01 times less risky than Raiffeisen Bank. The stock trades about -0.05 of its potential returns per unit of risk. The Raiffeisen Bank International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,799  in Raiffeisen Bank International on September 5, 2024 and sell it today you would earn a total of  92.00  from holding Raiffeisen Bank International or generate 5.11% return on investment over 90 days.

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

Facc AG  vs.  Raiffeisen Bank International

Facc AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Facc AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Raiffeisen Bank Inte

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Raiffeisen Bank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Facc AG and Raiffeisen Bank

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

The idea behind Facc AG and Raiffeisen Bank International 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.